Goldman Sachs stated that the recent weakness in Apple's (AAPL.US) stock price—which has fallen for seven consecutive weeks—presents a "buying opportunity" for the iPhone maker ahead of its quarterly earnings release.
Analyst Michael Ng at Goldman Sachs expressed his expectation for Apple's upcoming quarterly earnings per share to be $2.66, with iPhone revenue projected to increase by 13% year-over-year, shipments up 5% year-over-year, and growth in the Chinese market reaching as high as 26%. Ng maintained a "Buy" rating on Apple with a price target of $320.
Ng wrote in a report to clients, "Over the next two years, iPhone demand is likely to benefit from the iPhone Fold (expected to launch in Fall 2026, with shipments of 4.5 million and 25.4 million units in fiscal years 2026 and 2027, respectively), a shift to a twice-yearly iPhone release cycle (with the iPhone 18 series and iPhone Air 2 launch delayed from Fall 2026 to Spring 2027), and software upgrades such as iOS and Siri 2.0."
Although App Store spending slowed again in the first quarter of fiscal 2026 to 7% year-over-year growth, service revenue growth (Goldman Sachs expects 14% year-over-year growth) should be supported by momentum in other categories (e.g., TAC, iCloud+, AppleCare+), while new advertising formats in the App Store will provide further benefits in fiscal 2026.
Ng added that price and product mix growth for Apple's products, along with the ongoing transition to a services-oriented business, should help improve gross margins, even as memory costs rise.
Furthermore, the company's collaboration with Google (GOOGL.US) on Siri and sustained demand for the iPhone "should signal to the market that the iPhone will remain consumers' preferred device for accessing new AI tools, thereby eliminating competitive concerns."
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