Apple has had a rough quarter, but history and Wall Street analysis show there’s reason to expect an upturn. The tech giant is down more than 4% in March alone, bringing its first-quarter loss to almost 10%. Meanwhile, the tech-heavy Nasdaq Composite is up nearly 2% in March and more than 9% in the past three months. But that underperformance could be coming to an end. According to data from CNBC Pro, Apple shares have generally risen after a quarter that fell at least 10%. And Wall Street’s consensus forecasts imply that stocks could be on a rebound. The stock has struggled after the Justice Department filed a lawsuit against the company last week. In what is expected to be a major antitrust case, regulators say Apple has created a monopoly in the smartphone market. AAPL 3M mountain Apple over the past three months That added to the investor jitters seen earlier this quarter after demand for iPhones was questioned as the Chinese economy struggles. In fact, Counterpoint Research found that iPhone sales there fell 24% in the first six weeks of 2024. Concerns about long-term demand for the Vision Pro have added to concerns about product interest. Elsewhere, the stock appears to have missed much of the hype that competitors received for their artificial intelligence plans. Now, market participants appear to be waiting for clues or announcements on this topic, with many expecting news during Apple’s developer conference in June. ‘Best bought based on weakness’ Despite the difficult period, Wall Street sees reason for optimism. Nearly two in five analysts rate the stock as a buy, with the average price target implying an upside of more than 15%, according to FactSet. Ken Mahoney, CEO of Mahoney Asset Management, acknowledged that Apple was a “controversial” choice given its recent challenges. But Mahoney said the stock could test record highs again — which would require a gain of about 18% — if it can enter the AI space and find ways to generate revenue. A sell-off should actually be seen as a good entry point, he added. Apple “is a stock best to buy based on weakness in general because they probably have the best or one of the best management teams in the world,” Mahoney said. “It’s not a business for the faint of heart and needs a longer time horizon, but this is certainly not a business that will disappear anytime soon.” Melius Research analyst Ben Reitzes is even more optimistic, expecting the stock to rise nearly 27% and hit a new all-time high of $220. That target is based on a multiple of 30 times the company’s full-year 2026 earnings per share forecast of $7.35. Like Mahoney, Reitzes said his prospects depend in part on the company’s ability to break in meaningfully in the AI space, something he hopes to see information about at the developer conference. “In several ways, this target places Apple at a modest premium to elite consumer products companies, which lack Apple’s installed base, recurring revenue and long-term AI advantage,” Reitzes wrote to clients on Monday. “Apple has a lot to do to get there – like stabilizing China and overcoming overall growth challenges in the first half of 24. However, if it can deliver a new story in AI, we think we still believe it can more than make up for many obstacles. Until the June conference, he said Apple leaders “deserve the benefit of the doubt.” To be sure, others expect more moderate gains. After the Justice Department news, HSBC analyst Nicolas Cote-Colisson maintained his hold rating and price target of $180, which implies an upside of just under 4%. Good historical indicators History can also provide justification for the bullish price on the stock. After quarters in the past twenty years in which Apple fell at least 10%, the shares averaged about 10% in the subsequent three-month period. Apple was positive in nine of the fourteen quarters analyzed by CNBC Pro. In the average quarter after the losing quarter, shares rose more than 14%. To be fair, these quarters show a wide range of possible outcomes. After losing more than 11% in the second quarter of 2025, the shares came back to life with a rally of more than 45%. On the other hand, the last quarter of 2008 saw a sell-off of almost 25%, which only added to the decline of over 32% in the previous three-month period. — CNBC’s Fred Imbert contributed to this report
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Apple’s bad quarter and what history says will happen next
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