Apple rises after ‘strong’ Q3 but analysts also mull on tariffs, AI

Shares of Apple (NASDAQ:AAPL) rose about 2% premarket on Friday after the company’s third quarter fiscal 2025 results, however, Wall Street analysts had mixed reactions.

Citi kept its Buy rating on Apple and raised the price target on the stock to $245 from $207.57.

Analysts led by Atif Malik said that Apple outlook allayed investor fears on a September quarter revenue shortfall, post a pull forward positive impact on the June-quarter from tariffs and higher levels of promotional intensity in China.

Apple clarified the impact from pull forward was limited to around 1% (mostly concentrated in April in the U.S.) with channel inventory also at the low end of their target range, while outlook implies continued broad-based momentum in device upgrades and Services (despite recent App Store payment changes), though excluding potential impact from any Google Traffic Acquisition Costs, or TAC, changes, according to the analysts.

“Apple also noted higher levels of investments towards AI and left the door open for potential M&A to beef up AI offerings which we believe investors will view as a positive. Net-net, Apple’s fundamentals remain intact, and we believe a trio of product launches (Advanced Siri, Foldable Phone, Vision Pro 2) bodes well next year,” said Malik and his team.

Needham, which has a Hold rating on Apple, said the company reported strong fiscal third quarter results, but capex is rising and AI has been pushed out.

Analysts led by Laura Martin believe that Apple’s shares would not work until there is an iPhone replacement cycle. On their earnings call, Apple talked about next year’s integration of Apple Intelligence, which implies calendar 2025 woould not be the year.

“Meanwhile, Android with Gemini races ahead of iOS. We argue that AAPL is a single-product company (ie, iPhone) and its valuation risk is material if iOS falls too far behind Android,” said Martin and her team.

Oppenheimer reiterated its Perform rating on Apple.

Analyst Martin Yang said Apple reported strong third quarter results with revenue/EPS of $94.0B/$1.57. Greater China grew 4% year-over-year, improving from year-over-year declines in the previous two quarters.

Yang noted that Apple has navigated complex tariff challenges well with strong execution and an agile response from its supply chain. Its services’ offering continues to show sustainable growth potential.

“That said, we believe the stock is still overshadowed by government ruling on Google TAC, added costs relating to tariffs, and overall a weaker iPhone product cycle with underwhelming AI features,” said Yang.

Morgan Stanley kept its Overweight rating on Apple and raised the price target to $240 from $235.

Analysts led by Erik Woodring said this was Apple’s strongest quarterly report/guidance in over two years, with outperformance broad-based across Product/Services and regions.

“Historically, this would be a qtr [quarter] where bulls get louder, but until clarity emerges on tariffs and regulation, we wouldn’t expect AAPL to break out,” said Woodring and his team.