Why Is Apple (AAPL) Stock Down Today? Shares Slip to $332 as 1.5% GDP Miss Meets Q3 Earnings Jitters
On Thursday, Apple (NASDAQ: AAPL) closed at $331.81, a drop of 1.9%. Investors began taking profits on shares before...
On Thursday, Apple (NASDAQ: AAPL) closed at $331.81, a drop of 1.9%. Investors began taking profits on shares before the Apple Q3 earnings announcement. Reports of a slowdown in the U.S. economy raised expectations for the Fed to ease monetary policy with a rate cut in September. Analysts are expecting Apple to report $1.89 EPS, with a forecasted $109 billion revenue.
After reaching all-time highs, Apple shares retreated as investors locked in profits ahead of what is expected to be one of the most anticipated earnings reporting announcements in recent years. Although the U.S. reported sluggish growth and inflation, which are positive signs for the Fed to lower rates, investors are primarily focused on whether the earnings report and guidance will support the Apple share price after its recent 20% increase in the past month.
Soft GDP and Cooling Inflation Support Tech Stocks, But Earnings Remain the Main Catalyst
U.S. economic reports released on Thursday reflected a mixed outlook for the markets. The second quarter of 2023 annualized U.S. economic growth was reported at 1.5% (2.1% forecast). Core PCE inflation showed a monthly increase of 0.1%, suggesting continued deceleration of price increases. Initial jobless claims were reported at 197,000, a better than expected result, suggesting a continued strong labor market.
Deceleration of price increases supports the Fed cutting interest rates in September. Lower interest rates support elevated valuations for growth-oriented tech stocks.
However, the macro backdrop is less meaningful due to Apple’s earnings. Investors are taking profits, causing short-term volatility, rather than increasing exposure, even as the economic backdrop shows support, after reaching a record high earlier this week.
Apple Earnings Preview: Margins, AI Strategy and Leadership Transition in Focus
Apple will announce earnings for the fiscal third quarter after the market closes on Thursday. Expectations put earnings per share at $1.89 on revenue of $109 billion. Investors will be watching demand for the iPhone, revenue in Services, and gross margins, as well as comments on the outlook for the rest of the year.
Significantly, this will be Tim Cook’s last earnings call as CEO, as he will be transitioning out of the position. Apple will also be providing comments on the AI Strategy, as well as gross margins, pricing power, and demand, which have been impacted by increased cost of components.
In general, the market sees Apple positively in the long-term. One of the more bullish perspectives belongs to Bank of America, which has a $380 price target, as the ecosystem and Services continue to grow. Other analysts have begun exercising caution due to the increase in Apple’s stock price, as the optimism is reflected in the valuation.
Apple Technical Analysis: Profit-Taking Emerges Below $341 Resistance
After reaching $331.81, Apple has begun profit taking, as the stock price has been blocked at the $341.52 price level. A bearish daily candle has formed, but the healthy profit taking has not altered the bullish market structure.
Price is currently above the double-top breakout level at $317.31, now a new area of support. The price is also above the 50-day EMA at $309.87 and 200-day EMA at $278.74, affirming a continuing medium-term uptrend.
Price momentum appears to have cooled, with the RSI now at 60, after being recently seen in the overbought area. This indicates there has been a cooling of buying pressure, but a bearish reversal has not been indicated.
The price has a target of $341.52, with a breakdown of this price level exposing an upside target of $351.28 and $363.57. Immediate support is at $329.45, with the breakout price level at $317.31 and the 50-day EMA at $309.87.
Trade Setup
Buy Entry: Above $341.52
Targets: $351.28, then $363.57
Stop Loss: Below $329.45
A drop below $329.45 would increase the chance of support at $317.31. However, better-than-expected earnings with an increase in the guidance would help bullish support and increase the likelihood of price all-time highs.
Frequently Asked Questions
Why is Apple (AAPL) stock down today?
The drop in Apple AAPL stock seems to be the result of an increase in selling in the stock before the AAPL fiscal Q3 earnings report. Although lower U.S. GDP growth and declining inflation has strengthened the expectation of a decreased U.S. Fed interest rate, selling pressure has increased in the Apple stock ahead of the earnings report.
What are analysts expecting in Apple’s Q3 earnings?
Analysts are predicting earnings per share to be in the area of $1.89, resulting in total earnings of roughly $109 billion. Analyst’s and investors’ focus will be on the outlook of sales of the iPhone and Services, and the outlook of management in regard to fiscal 2026.
What are the primary post-earnings Apple price levels?
Apple’s immediate resistance is $341.52, $351.28, and $363.57. Support levels consist of $329.45, $317.31, and the 50-day EMA at $309.87. Decisive movement beyond these levels is likely to set the next significant price trend for Apple.
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