Apple is preparing to unveil new iPhones. What do analysts advise to do with the stock?

Investors expecting Apple's main product event of the year to be a new catalyst for growth in its shares may be disappointed, Bloomberg warns. Analysts do not see any drivers for further growth in the stock. They already rose more than 3% last week thanks to the court ruling in the antitrust case against Google.

If the presentation of new Apple products on September 9 will not present surprises, the potential for further growth of the company's shares may be limited: since the end of July, the company's capitalization has already added almost $430 billion, Bloomberg writes. The iPhone maker continues to be pressured by questions about its artificial intelligence strategy, and this curbs investor enthusiasm, the agency notes.

"It's hard to recommend opening or building a position before the event, especially after such a rally," Prime Capital Financial portfolio manager Clayton Allison told Bloomberg. - We don't expect breakthrough features that will really inspire consumers to buy. If the AI failure continues, I'd be concerned about the securities."

Even despite a 38% rise from April's low, Apple's securities remain down more than 5% since the beginning of the year, while the Nasdaq 100 index has added 13%. Current levels - near the highs since February - may prompt investors to take profits, as has often happened in the past, the agency suggests.

"iPhone presentations traditionally lead to profit taking," Bank of America noted in an Aug. 25 note. However, as analyst Vamsi Mohan notes, stocks tend to rebound in the next 30-60 days.

Even if the new products don't impress consumers, Wall Street sees another path to revenue growth - raising prices, something Apple hasn't done in years.

"Apple's ability to raise prices is an underappreciated growth driver," Morgan Stanley analysts led by Eric Woodring wrote on Sept. 4. The decision to raise prices, combined with "cautious revenue growth expectations for fiscal 2026," could make the presentation a positive catalyst, they emphasized.

"We are quietly holding Apple, but without much enthusiasm because the stock is not cheap and the upside is limited," David Katz, chief investment officer at Matrix Asset Advisors, told Bloomberg. - The biggest risks have gone away, but the next momentum will only come when there is a clear roadmap for bringing AI into products. If it is unveiled at this event, it will come as a surprise. In the long term, the stock will probably rise, but in the short term, I don't see much potential."

August was the best month for Apple investors since mid-2023, according to Bloomberg: quotes of the iPhone maker added almost 12%. This was partly helped by easing fears about President Donald Trump's duties.

In addition, Apple's securities rose 3.3% last week thanks to a court ruling in an antitrust case against Google. The court allowed Alphabet to continue paying Apple billions of dollars for placing the default search engine on iPhone devices.

In addition to the smartphone lineup, the company is expected to show off the new Apple Watch and Vision Pro headsets. The key question is whether this will be enough to accelerate the growth of the papers, which have long lagged behind competitors. This is especially important amid a lack of advanced AI features and expectations of massive changes in the future, including the release of a foldable iPhone in 2026, emphasizes Bloomberg.

Historically, as agency data shows, Apple shares are more likely to fall on the day of the announcement of new iPhones. In the AI era, this risk is amplified: if the event does not convince investors that the company is making real steps towards AI, it will only increase doubts about further weak growth and overvaluation of the securities.

According to the results of the third quarter of fiscal year 2025 (ended June 28) Apple showed the maximum revenue growth for three years - by 10%. However, analysts, according to Bloomberg, expect growth rates to slow down in the next two quarters. At the same time, Apple's indicators are inferior to competitors like Alphabet and Meta, whose shares are traded at lower multiples, the agency emphasizes. Apple shares are traded at a price that is 30 times higher than the company's projected net income per share for the next 12 months (P/E - forward price-to-earnings ratio). This makes Apple the second (after Nvidia) most expensive among the six largest companies in the S&P 500, emphasizes Bloomberg.

The combination of high valuation and sluggish growth has cooled investor interest, the agency summarizes. Less than 60% of analysts tracked by Bloomberg recommend buying Apple shares. By comparison, Microsoft has a "buy" rating from 97% of analysts. Apple shares ended Monday's trading at $237.9 - on par with the Wall Street consensus estimate of $238, indicating subdued growth expectations over a 12-month horizon.

This article was AI-translated and verified by a human editor