Apple Stock AAPL Slips Below $325 Ahead of Earnings After Overtaking Nvidia as World’s Most Valuable Company
Apple shares retreated from the highs on Monday as investors locked in profits ahead of next week's earnings report, with strong analyst forecasts offset by broader market weakness and growing caution following the stock's impressive rally.
Quick overview
- Apple shares fell nearly 3% on Monday, retreating from record highs as investors took profits ahead of the upcoming earnings report.
- Despite the decline, Bank of America maintained a Buy rating on Apple, forecasting strong revenue and earnings for the June quarter.
- Analysts expect Apple's Services division to continue driving growth, with a projected 14% year-over-year revenue increase.
- The upcoming earnings report is seen as a critical catalyst, with any negative surprises potentially leading to increased volatility in the stock.
Apple shares retreated from the highs on Monday as investors locked in profits ahead of next week’s earnings report, with strong analyst forecasts offset by broader market weakness and growing caution following the stock’s impressive rally.
Apple Shares Retreat After Reaching Record High
Apple Inc. shares declined nearly 3% on Monday, falling below the $325 level after reaching a record high of around $335 last Friday.
The pullback came despite a constructive outlook from Bank of America, as investors reduced exposure ahead of the company’s highly anticipated fiscal third-quarter earnings report. Broader weakness across the S&P 500 and profit-taking after Apple’s recent rally also weighed on sentiment.
The decline follows a remarkable year for Apple, with the stock gaining roughly 23%, outperforming several other members of the Magnificent Seven.
Bank of America Remains Optimistic
Despite Monday’s decline, Bank of America reaffirmed its Buy rating on Apple and maintained a $380 price target.
The firm expects Apple to outperform Wall Street expectations, forecasting June-quarter revenue of approximately $109 billion and earnings per share of $1.89, both slightly ahead of consensus estimates.
Analysts continue to see healthy iPhone demand, while Apple’s Services division remains one of the company’s strongest growth drivers.
Revenue from iCloud subscriptions, digital services, and Apple’s search partnership with Alphabet is expected to support another quarter of double-digit Services growth, with margins remaining among the highest in the technology sector.
Services and Product Pipeline Support Long-Term Growth
Bank of America believes Apple’s Services business will continue expanding at a healthy pace, with revenue expected to grow around 14% year over year.
The brokerage also expects gross margins to improve later in the year as Apple introduces higher-priced iPhone models, including its long-rumored foldable device.
Although product margins may soften over the next two quarters due to launch timing and higher production costs, analysts believe pricing power and potential tariff-related benefits could help profitability recover during the holiday quarter.
AAPL Shares Rebound Off the 100 SMA
Apple reported a better-than-expected fiscal Q2 2026, pushing its stock higher above $300, making a new high after breaking its December 2025 peak of $288. The buying momentum continued throughout May and AAPL stock price reached $317.40 in May but then made a steep reversal and slipped to $274 in June when it found support at the 100 SMA. We have seen a strong rebound since then, but the price has reversed lower on Monday.
AAPL Chart Daily – Reversing from All Time Highs
Apple Overtakes Nvidia Before Pullback
Apple recently reclaimed the title of the world’s most valuable publicly traded company, briefly reaching a market capitalization of approximately $4.9 trillion before easing back to around $4.77 trillion.
The move reflected growing investor preference for companies generating AI-related growth without the enormous infrastructure spending required by many semiconductor firms.
Unlike several AI leaders investing heavily in data centers and advanced chips, Apple has benefited from expectations that it can integrate artificial intelligence into its ecosystem while maintaining stronger capital discipline.
Cautious Note
While Apple’s fundamentals remain strong and analysts continue to project resilient iPhone and Services growth, expectations heading into next week’s earnings report have risen considerably after the stock’s record-breaking rally. Any disappointment in guidance, margins, or product demand could trigger additional volatility, making the upcoming earnings release a key catalyst for the shares.
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