Apple (AAPL, Financial) is exploring the possibility of integrating AI-powered search capabilities into its Safari web browser. This potential move comes amid a shift in the tech landscape and the scrutiny over Apple's lucrative search agreement with Google. Eddy Cue, Apple's senior vice president of services, shared insights during Google's antitrust trial, revealing that for the first time, searches on Safari declined last month, a trend attributed to increasing use of AI technologies.
Cue suggested that search providers like Perplexity AI and Anthropic could become viable alternatives to traditional search engines such as Google, which currently holds the default position in Safari under a $20 billion-per-year deal. Despite this, Cue expressed a preference for maintaining Google as the default due to the significant revenue it generates for Apple.
The broader context involves the U.S. Department of Justice's antitrust actions against Google, including a recent proposal for the company to divest some of its ad-tech assets to restore competition. As these developments unfold, Apple's stock saw a more than 2% decrease, trading at $194.26 in late morning trading.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 43 analysts, the average target price for Apple Inc (AAPL, Financial) is $234.21 with a high estimate of $300.00 and a low estimate of $141.00. The average target implies an upside of 20.44% from the current price of $194.47. More detailed estimate data can be found on the Apple Inc (AAPL) Forecast page.
Based on the consensus recommendation from 51 brokerage firms, Apple Inc's (AAPL, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Apple Inc (AAPL, Financial) in one year is $209.05, suggesting a upside of 7.5% from the current price of $194.47. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Apple Inc (AAPL) Summary page.
AAPL Key Business Developments
Release Date: May 01, 2025
- Revenue: $95.4 billion, up 5% year over year.
- Diluted EPS: $1.65, up 8% year over year.
- iPhone Revenue: $46.8 billion, up 2% year over year.
- Mac Revenue: $7.9 billion, up 7% year over year.
- iPad Revenue: $6.4 billion, up 15% year over year.
- Wearables, Home, and Accessories Revenue: $7.5 billion, down 5% year over year.
- Services Revenue: $26.6 billion, up 12% year over year.
- Gross Margin: 47.1%.
- Operating Expenses: $15.3 billion, up 6% year over year.
- Net Income: $24.8 billion.
- Operating Cash Flow: $24 billion.
- Shareholder Returns: $29 billion returned, including $3.8 billion in dividends and $25 billion in share repurchases.
- Cash and Marketable Securities: $133 billion.
- Net Cash: $35 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Apple Inc (AAPL, Financial) reported $95.4 billion in revenue, up 5% year over year, with a March quarter record for diluted EPS at $1.65.
- Services achieved an all-time revenue record of $26.6 billion, growing 12% compared to the prior year.
- iPhone revenue increased by 2% year over year, driven by the iPhone 16 family, with a strong active installed base.
- Mac revenue grew by 7% year over year, with every geographic segment showing growth and high customer satisfaction.
- Apple Inc (AAPL) announced plans to invest $500 billion in the US over the next four years, expanding facilities and sourcing more components domestically.
Negative Points
- Wearables, Home, and Accessories revenue declined by 5% year over year, facing a difficult comparison against previous product launches.
- The company faces a potential $900 million cost impact from tariffs in the June quarter, with uncertainty about future tariff changes.
- China revenue decreased by 2% year over year, although it was roughly flat when adjusted for foreign exchange headwinds.
- Product gross margins decreased by 340 basis points sequentially, driven by mix, foreign exchange, and seasonal loss of leverage.
- There are ongoing legal challenges, including the Epic case and Google antitrust trial, which could impact Apple Inc (AAPL)'s Services business.
