Maxim Group Upgrades Apple Inc. (NASDAQ:AAPL) to "Buy"

• Apple Inc. (NASDAQ:AAPL) upgraded by Maxim Group from "Hold" to "Buy" following strong Q1 fiscal 2025 financial performance.
• Adjusted earnings of $2.40 per share, surpassing Zacks Consensus Estimate by 1.69%, with net sales increasing by 4% year over year to $124.3 billion.
• Services revenue surged by 14% to $26.34 billion, accounting for 21.2% of total sales, highlighting the growing importance of Apple's services sector.

On January 31, 2025, Maxim Group upgraded Apple Inc. (NASDAQ:AAPL) from "Hold" to "Buy," with the stock priced at $237.59. This upgrade comes amid Apple's strong financial performance in its first-quarter fiscal 2025 results, as highlighted by Benzinga. The company's robust services sector growth played a significant role in this positive outlook.

Apple reported adjusted earnings of $2.40 per share, surpassing the Zacks Consensus Estimate by 1.69%. This strong earnings performance contributed to a more than 3% rise in Apple's shares during pre-market trading. The company's net sales increased by 4% year over year, reaching $124.3 billion, exceeding the Zacks Consensus Estimate by 0.24%.

A key driver of Apple's growth is its services revenue, which surged by 14% from the previous year to $26.34 billion, accounting for 21.2% of total sales. This growth in services revenue also surpassed the consensus mark by 0.63%. Apple's services portfolio now includes over 1 billion paid subscribers, with double-digit growth in paid subscriptions year over year.

Despite a slight 0.8% decline in iPhone sales, Apple's resilience is evident. Angelo Zino from CFRA Research increased his price target for Apple to $270, citing the company's strong services business and effective cost reductions. Apple's exposure in China has decreased from 20% to 15%, yet demand in the region remains stronger than anticipated.

Apple's revenue from China decreased by 11% year-over-year, but this does not reflect weak demand. The company continues to experience steady double-digit growth in service revenues, which have double the gross margins compared to its product business. Despite the iPhone 16 Series launch missing estimates, Apple's large and growing installed base of products suggests a bullish outlook.