Apple Poised for Steady Growth as Emerging Markets and Services Drive Momentum

Evercore ISI analysts reaffirmed an Outperform rating on Apple (NASDAQ:AAPL), maintaining a price target of $250 on the stock. The analysts remain optimistic about Apple’s ability to deliver results in line with expectations, supported by growth in emerging markets and robust performance in its Services and Wearables segments, including new AirPods and Apple Watch offerings.

Heading into the March quarter, Apple’s ongoing strong iPhone cycle is anticipated to sustain momentum, potentially outpacing seasonal trends. However, China remains a critical variable. While industry data has suggested potential iPhone weakness, this may serve to temper expectations, providing an opportunity for the stock to perform even if guidance slightly underwhelms. Despite incremental discounting of the iPhone 16 in China, demand is expected to remain steady, buoyed by emerging markets, which now contribute a growing share of iPhone sales.

In China, Apple has shown resilience against heightened competition from Huawei. The company’s ability to maintain flat year-over-year revenue in September 2024 underscores its durability in this key market. Reports of Huawei’s struggles to secure sufficient chip supplies further bolster Apple’s competitive position.

Apple's gross margins for the December quarter are expected to align with the 66-67% guidance, with similar projections for March 2025. Looking ahead, the analysts believes investor attention is likely to shift toward the iPhone 17, which is rumored to feature a new form factor—a development that could provide an additional tailwind for the stock.