Apple Chart Suggests Investors Aren't 'Buying The Fear': iPhone, AI Expectations In Focus For Q2

Apple Inc AAPL is set to report second-quarter earnings on Thursday after market hours.

Wall Street expects $1.40 in earnings per share (EPS), and $84.12 billion in revenue. That’s down from the $1.52 in EPS and $94.84 billion in revenue, reported for the same quarter, last year.

Despite recent challenges, Apple’s strong track record of beating earnings expectations could offer some optimism for investors.

Also Read: Wall Street Braces For Brutal Apple Earnings, But Top Analyst Gives 6 Reasons To Stay Bullish On iPhone Maker

Analyst Suggests ‘Buying The Fear’

Apple stock is down 11.53% year-to-date, weighed down by a weak iPhone 15 cycle.

Bernstein analyst Toni Sacconaghi suggests “buying the fear” in Apple stock, anticipating a strong iPhone 16 cycle.

Analysts await updates on iPhone sales, services revenue, and capital return plans from Apple’s Q2 report. For the next few quarters, also under watch would be Apple Vision Pro headset sales and potential AI advancements.

Let’s look at what the charts indicate for Apple stock, and how the stock currently maps against Wall Street estimates.

Apple Stock’s Bearish Setup Ahead Of Q2 Earnings 

Charts indicate that the current trend for Apple stock is relatively stagnant with selling pressure, indicating bearish market momentum towards the stock. However, there are certain green shoots emerging among the oscillators for Apple bulls.

Chart: Benzinga Pro

The stock price is currently at $170.01. That’s above the eight-day simple moving average (SMA) of $169.35 and the 20-day SMA of $169.64, suggesting positive momentum.

However, Apple stock is below the 50-day SMA of $172.61 and significantly below the 200-day SMA of $181.47, both indicating a bearish signal.

The exponential moving averages (EMA) are presenting mixed signals as well.

Chart: Benzinga Pro

Additionally, the Moving Average Convergence Divergence (MACD) indicator is -0.80, indicating bearishness.

The MACD line has been treading upwards recently and has also crossed over the signal line. When the MACD line crosses from below to above the signal line, the indicator is considered bullish. The further below the zero line the stronger the signal.

The Relative Strength Index (RSI) of 48.16 suggests the stock is in the Neutral territory. The Bollinger Bands have been trying to keep Apple stock price within the lower (bearish). However, the stock has recently crossed over to the upper (bullish) bollinger band, suggesting positive momentum scoring over negative.

Overall, the technical indicators for Apple stock suggest a bearish trend. Clearly, investors are not “buying the fear,” yet.

Oscillators suggest there is the potential for bulls to take over if positive market momentum sustains.

Apple Analysts Consensus Points To 20% Upside

Ratings & Consensus Estimates: The consensus analyst rating on Apple stock stands at an Outperform currently with a price target of $196.77 a share. The more recent analyst reviews on the stock, April 22 onwards, came from Citigroup, Bernstein, and Morgan Stanley. These three firms have an average price target of $205 per share, implying a 20.62% upside for Apple stock.

Upcoming events include a May 7 product launch event and WWDC on June 10 may serve as catalysts for Apple stock over the near-term. Analysts are anticipating further insights into Apple’s AI plans at these events. Apple’s underperformance has been linked by many to its AI lag. Hence, expectations for AI progress at WWDC could boost investor confidence.

AAPL Price Action: Apple stock closed the trading day, Tuesday, at $170.33, down 1.83% for the day.

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