Apple’s Q2 earnings report gave Wall Street a lot to like.
Bank of America analysts were all praise for the Cupertino giant’s performance, giving them enough confidence to raise their price target to $330 (18% higher than current prices), while keeping a buy rating.
Q2 was another massive beat-and-raise quarter, with Apple surging past estimates on both lines over the past four quarters by a wide margin.
However, BofA analysts now frame the next test around Apple’s Q3 Services momentum, which could keep its bull case alive and potentially lead to a richer multiple.
That matters because Apple stock trades at a nosebleed valuation, nearly 32 times forward non-GAAP earnings, about 11% above its five-year average, according to Seeking Alpha.
In terms of sales, the picture gets even murkier, with the stock trading at nearly nine times sales, about 167% above the sector median.
In its newest Q3 update, BofA said App Store revenue rose 3.7% year over year after 33 days, reaching $3.2 billion.
Given the current setup, it’s clear that while strong demand has opened the door, recurring digital sales are what underpin and justify a richer multiple for Apple stock.
Wall Street price targets for Apple stock after earnings
- Wedbush set Apple’s price target at $350.
- TD Cowen raised Apple’s price target to $335.
- Morgan Stanley raised Apple’s price target to $330.
- Wells Fargo raised Apple’s price target to $310.
- UBS raised Apple’s price target to $296.
- Barclays raised Apple’s price target to $253.
Sources: StockAnalysis.com, Benzinga
BofA stays bullish on Apple after earnings
- The bank reiterated its buy rating on Apple stock while raising its price target from $325 to $330.
- March-quarter sales jumped 16.6% to $111.2 billion, blowing past Wall Street’s $109.3 billion estimate.
- EPS skyrocketed 22% to $2.01, comfortably above the consensus of $1.94.
- iPhone revenue spearheaded things, jumping 21.7% to $57 billion, led by the iPhone 17 family and record upgraders.
- Services revenue also increased by 16.3% to $31 billion, while gross margin was at a lofty 49.3%.
BofA analysts remained unequivocally bullish on Apple stock post earnings, mostly on the back of robust iPhone demand and stronger China trends.
What stood out the most was its ability to weather the memory storm, posting relatively strong margins, despite the headwinds.
As we look ahead, the firm sees significant upside from AI-powered Siri, a foldable iPhone, and ongoing shareholder returns.
On the flip side, it pointed to potential risks stemming from a potentially sluggish iPhone cycle, tariff pressures, and a stronger dollar.
NIC COURY/AFP via Getty Images
Apple stock returns vs. the S&P 500
- 1M: 8.41% versus the S&P 500’s 10.12%
- 6M: 2.50% versus the S&P 500’s 5.86%
- YTD: 1.93% versus the S&P 500’s 5.78%
- 1Y: 29.91% versus the S&P 500’s 29.21%
- 3Y: 63.41% versus the S&P 500’s 73.73%
- 5Y: 110.80% versus the S&P 500’s 73.18%
Source: Seeking Alpha
BofA sees Apple Services’ momentum building
BofA analysts expect Apple’s momentum to continue, driven in part by strength in its Services segment.
For perspective, roughly five years ago in fiscal 2020, Apple’s Services business generated $53.8 billion out of Apple’s $274.5 billion in net sales (19.6% of revenue).
By fiscal 2025, that number more than doubled to $109.2 billion (26.2% of Apple’s $416.2 billion in sales).
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To understand the importance of Apple’s services division, picture the iPhone as a stadium.
However, the Services side includes concessions, ticket fees, and parking, essentially the revenue generated after the customer walks in.
Apple’s latest quarterly results reinforced that view, with Services sales of $31 billion constituting 28% of total sales.
Consequently, the bank is modeling an eye-catching 14% year-over-year increase in sales growth for fiscal Q3 on the services side, even as it sees App Store data showing a more measured, yet still positive, start.
After the first 33 days, App Store sales rose 3.7% to $3.2 billion, up from $3.1 billion a year earlier.
Downloads increased just 0.7% to 3.12 billion, but spending per download moved 3% to $1.01, underscoring Apple’s ability to generate higher incremental sales from each user interaction.
Results in April tracked a lot better, with global App Store sales rising 4.4% while downloads rose only 0.8%.
The highlight was China, where App Store sales leapt 10.2%, its first double-digit growth since April 2025.
At the same time, the sales mix is changing.
Games remained the largest App Store category, accounting for 42% of sales, but their share was down substantially.
Productivity increased by 242 basis points, or 7%, led by higher demand for AI-related apps. On top of that, ChatGPT generated more than $240 million in April App Store sales, while Gemini reached about $7 million.
Related: Bank of America revamps Amazon stock target after earnings
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