BofA Securities analysts adjusted Apple (NASDAQ:AAPL) price target to $253 from $256 while reiterating a Buy rating, highlighting a mixed near-term outlook for the tech giant driven by evolving demand dynamics for its flagship iPhone.

Apple is set to announce its fiscal Q1 2025 earnings on January 30, with expectations of a strong quarter fueled by robust initial demand for the iPhone 16. The analysts forecast revenues of $126 billion, slightly above the Street consensus of $124 billion, with estimated iPhone unit sales of 79 million, compared to Wall Street's projection of 77 million. However, looking ahead to Q2 2025, weaker macroeconomic conditions and a gradual rollout of Apple Intelligence features are expected to dampen iPhone sales. BofA has revised his Q2 iPhone sales estimate to 49 million units, down from 56 million, against the consensus estimate of 52 million.

For fiscal 2025 and 2026, Apple’s iPhone sales projections have also been trimmed, with forecasts now at 229 million and 246 million units, respectively, compared to prior estimates of 239 million and 257 million. Despite this, Apple's Services segment remains a bright spot, with revenue growth expected to reach 13% year-over-year in Q1 and 14% for the remainder of the fiscal year. App Store revenue in particular has shown strong momentum, growing 15% year-over-year during the December quarter.

The analysts remain optimistic about Apple’s margin resiliency, robust cash flow generation, and potential tailwinds from gross margin improvements. They suggest that while the market has largely accounted for weaker iPhone sales, investor attention is likely to shift toward upcoming catalysts, including the Worldwide Developers Conference (WWDC), expanded AI partnerships like Gemini, and the anticipated iPhone 17 launch.