Apple Inc. stock climbed 3% on Friday, outperforming much of the technology sector even as semiconductor stocks came under pressure.
The gains came after Baird raised its price target on the iPhone maker while maintaining an Outperform rating ahead of the company’s upcoming quarterly earnings report.
The broader technology sector was weaker during the session. The Nasdaq Composite fell 0.19%, while shares of Intel, Micron and Advanced Micro Devices declined between 1% and 5%.
Apple’s relative strength comes as investors prepare for the company’s fiscal third-quarter earnings report, scheduled for July 30, and assess several product and software initiatives expected over the coming months.
Baird raises price target ahead of earnings
William Power, Senior Research Analyst at Baird, raised the price target on Apple to $330 from $310 on Thursday while reiterating its Outperform rating.
The brokerage expects Apple to deliver solid fiscal third-quarter results, supported by continued iPhone demand and stable growth in its services business.
While memory pricing remains a headwind, Baird expects recent price increases to help offset some of that pressure.
The brokerage acknowledged that Apple’s valuation appears elevated compared with historical levels but believes several factors continue to support the stock.
Port in the storm (of software and mega-cap tech capex). We expect solid FQ3 results, driven by strong iPhone growth and steady services trends. Memory pricing remains a daunting headwind, though price increases should ease the pressure. Valuation looks rich relative to past trends, suggesting much may be priced in, but we expect the strong free cash flow, upcoming product cycle and early positive comments on Siri AI to support the stock. We also think Street estimates over the NTM are set up well, with potential for further upside.
William Power
Senior Research Analyst, Baird
According to Baird, Apple generated approximately $129 billion in free cash flow over the last twelve months, while an upcoming product cycle and encouraging early commentary surrounding Siri AI could provide additional support for shares.
The firm also believes Wall Street earnings estimates for the next twelve months leave room for further upside.
Investors focus on earnings and product launches
Apple is scheduled to report earnings on July 30, with options markets implying a potential 3.5% move in the stock following the results.
Beyond earnings, investors are closely watching Apple’s upcoming hardware refresh.
The company is preparing to introduce its next-generation M6 processor across its Mac lineup beginning this fall and extending into next year.
The refresh is expected to include updated 14-inch MacBook Pro models and new iMac computers, marking the first refresh for the desktop line in two years.
Apple is also preparing to launch Apple Upgrade, a new device leasing program backed by Klarna. The service is scheduled to become available in the United States on July 28.
Separately, Evercore ISI reiterated its Outperform rating and maintained a $365 price target following news of the Apple Upgrade program.
The investment firm also maintained its bullish stance after reports that Apple is engaged in settlement discussions with the US Department of Justice over an antitrust lawsuit filed in March 2024.
Automotive expansion
Apple is also expanding its presence in the automotive software market.
The company announced that Ford will become the first automaker to adopt its new MapKit for Automotive software development kit.
The technology will be integrated into dashboards across Ford’s forthcoming electric vehicle platform and will also provide road data for the automaker’s BlueCruise hands-free driving system.
The announcement marks a deeper expansion into vehicle software following Apple’s decision two years ago to end its own electric vehicle project.
Unlike CarPlay, which primarily provides infotainment services, the new automotive software integrates Apple’s mapping technology more directly into vehicle systems.
With earnings approaching, new hardware launches on the horizon and continued expansion into automotive software, investors will be closely watching whether Apple can sustain its recent outperformance amid broader volatility across the technology sector.
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