All eyes are on Manzana. The apple firm is accountable this Thursday after the market closes and expectations could not be more pessimistic given the results of the already known as «struggling member of the Magnificent Seven». The business weakness in China and his delay in advances related to artificial intelligence (AI) They will be the keys to follow in the market. «Expectations are low given that Apple's Chinese business took a hard hit in the first quarter when competitors increased their market share against the apple giant. Most likely real results are not surprising to anyone,» explains Ipek Ozkardeskaya, senior analyst at Swissquote Bank. And, according to the latest research report published by Counterpoint Researchthe iPhone sales have fallen 19.1% in the first quarter of 2024 in the Chinese market, which represents the worst company performance since 2020, when it was heavily pressured by the Covid-19 pandemic. «We already know that sales of the iPhone, Apple's flagship product, have fallen substantially in China in the first quarter, so The question is what effect does this have on profits?«, assess the XTB strategists. In this sense, the market expects some revenues of more than $90 billion for the quarter, which represents a drop of 5% compared to the previous quarter, with a net profit of $23 billion and adjusted earnings per share of $1.5. «It's worth noting that analysts have revised downward their expectations for Apple's results in the last month. Although the bar has been lowered, it is also a sign that the market is bearish facing these results«, they add from XTB. However, there are still those who are optimistic about Apple, such as the Bernstein expertswho believe that the Cupertino firm has overpaid in a bag fears founded by the fall in iPhone sales in China and its exposure to the Asian giant, so They recommend «being like Buffett», in reference to the renowned investor Warren Buffett, and buy cheap stocks. «Despite his reputation as a long-term buy-and-hold investor, Warren Buffett has been remarkably disciplined in increasing his position in Apple when it is relatively cheap and cut it when it is relatively expensive,» highlights analyst Toni Sacconaghi
THE OTHER BIG DOUBT: ADVANCES IN AI
The other major focus of concern for the market regarding Apple is its advances in AI or, rather, their little progress in the face of this new technological 'boom'. «What investors expect now are plans and projects on how Apple will integrate AI into its devices and about how will you catch up with your delay in AI. The good news is that, since Apple is not seen as a high-tech company, any promising step in AI could get decent leverage on the company's high brand value,» adds Ozkardeskaya. Therefore, the expert believes that Whether investors are convinced Apple has a solid AI plan«we could see a positive reaction to otherwise weak quarterly results.» Indeed, investors will be looking for a update on Apple's AI strategysince it is the only one of the 'Magnificent 7' that has not developed this technology internally, but has sought alliances, for example with Google, to implement it in their products. «The market will want a update on this passive AI strategy and if it is bearing fruit. On the positive side, it is unlikely that Apple will report on the huge capital expenditure on AI that sent Meta shares tumbling last week,» they conclude in XTB.