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After a long dry spell, Apple (AAPL) has finally turned a corner in China. For the first time since the second quarter of 2023, iPhone sales in the nation grew 8% year-over-year (YOY) in Q2 2025. The turnaround, as per Counterpoint Research, breaks a two-year streak of declining sales in one of Apple’s most strategically vital markets.
Several levers drove this sudden change in tide. Apple slashed prices aggressively in May, a move timed deliberately ahead of China’s 618 shopping festival. The strategy, coupled with support from a national subsidy program aimed at encouraging smartphone upgrades, triggered a noticeable spike in demand.
Counterpoint Associate Director Ethan Qi confirmed that three iPhone variants landed in the top half of China’s bestseller charts during 618. Though the 618 shopping period itself remained flat compared to last year, the lead-up month of May delivered the real gains.
With strong demand for the iPhone 16 Pro and Pro Max models, Apple is now expected to post high single-digit growth in China for the remainder of the quarter. China remains a critical source of revenue, and if Apple maintains its current momentum, this rebound could extend deeper into the fiscal year.
About Apple Stock
Apple may be synonymous with the iPhone, but the company’s value story runs far deeper than any single product line. Headquartered in California, the tech giant holds a commanding market capitalization of $3.2 trillion, with a business model that has steadily evolved into a powerful ecosystem play.
While the iPhone remains the core revenue driver, Apple’s Services segment has become an engine of dependable cash flow. At the same time, Apple has carved out leadership in the wearables and hearables markets through sustained demand for the Apple Watch and AirPods.
These products not only contribute to revenue but deepen user engagement across the broader ecosystem. Investor sentiment reflects this growing confidence. Over the past three months, AAPL stock has gained 16%. Meanwhile, in the past five sessions alone, the stock has jumped 4%, easily outpacing the broader S&P 500 Index’s ($SPX) 1% rise.
AAPL stock trades at 30 times forward earnings and 8 times sales, both well above industry averages, signaling premium expectations.
For income-seeking investors, Apple also offers stability through dividends. It pays an annualized forward dividend of $1.01 per share, yielding 0.47%, with its most recent $0.26 per share payout made on May 15 to shareholders of record as of May 12. The company has raised its dividend for 13 consecutive years.
Apple Surpasses Q2 Earnings
On May 1, Apple delivered its second-quarter earnings for fiscal 2025, surpassing Street forecasts. Total revenue reached $95.4 billion, up 5.1% YOY and coming in ahead of consensus estimates of $94.3 billion.
The company’s Products revenue came in at $68.7 billion, growing 2.7% YOY. The uptick was led by better-than-expected iPhone, iPad, and Mac sales. Importantly, Apple noted that its active installed base of devices hit record levels across all categories and geographies, a direct result of customer satisfaction and long-term brand loyalty. Services revenue climbed 11.6% YOY to $26.6 billion, even after accounting for foreign exchange headwinds. This line item continues to be Apple’s most durable growth lever.
Meanwhile, gross margin improved to 47.1%, landing in the midpoint of guidance. Net income grew 4% to $24.8 billion, and EPS rose 7.8% to $1.65, ahead of the Street’s $1.61 estimate. Operating cash flow remained strong at $24 billion, underlining the company’s financial health and cash-generation capacity.
Looking ahead, Apple guided for total company revenue in the June quarter to grow in the low- to mid-single-digit range YOY. Gross margin is expected between 45.5% and 46.5%, even after including an estimated $900 million hit from tariff-related costs. Operating expenses are projected between $15.3 billion and $15.5 billion.
As for earnings, analysts anticipate fiscal 2025 third-quarter EPS to rise 1.4% YOY to $1.42. For full fiscal 2025, EPS is projected to increase 5.3% to $7.11 and climb another 8.3% to $7.70 in fiscal 2026.
What Do Analysts Expect for Apple Stock?
Analyst sentiment on AAPL stock remains broadly optimistic, anchored by the company’s stability and long-term growth potential. The stock holds an overall rating of “Moderate Buy,” reflecting a consensus view across Wall Street that balances upside potential with near-term caution.
Of the 37 analysts covering AAPL, 18 offer a “Strong Buy,” three rate it as a “Moderate Buy,” 14 maintain a “Hold,” and two assign a “Strong Sell" rating. While not universally bullish, the majority of analysts lean in favor of continued upside.
The average price target of $230.92 represents potential upside of 10%. Meanwhile, the Street-High target of $300 suggests a potential climb of 43% from current levels.
