Apple Stock Price Levels to Watch After Earnings Report as iPhone Upgrades in Focus

As Apple Inc. (NASDAQ:AAPL) prepares to release its fiscal third-quarter earnings report on August 1, investors are eagerly awaiting the tech giant's performance and guidance. The earnings report will provide valuable insights into Apple's recent financial health and its outlook for the coming quarters. In this article, we will discuss the key price levels on Apple's chart that investors should monitor after the earnings report and how the iPhone upgrade cycle could influence Apple's stock price in the near and long term.

Key Price Levels to Watch After Earnings Report

1. $260 Area: This crucial overhead area aligns with Apple's all-time high and the upper trendline of the rising wedge pattern. If the stock breaks above this level, it could indicate a strong bullish momentum and potentially signal a move towards the projected high of $350. Investors should keep an eye on this level to gauge Apple's ability to maintain its upward trend.
2. $235 Level: This major support level corresponds with the lower trendline of the rising wedge pattern and the upper range of a consolidation period that formed on the chart between July and October 2024. During pullbacks, investors should monitor how the price responds to a retest of this level, as it could provide a buying opportunity.
3. $218 Level: This important support level is near the lower range of the consolidation period mentioned above and also sits in close proximity to the rising 50-week moving average. A decline below this level could see Apple shares retrace to around $207, which is a region where buyers may look for entry points.

The iPhone Upgrade Cycle and Apple's Stock Price

The iPhone upgrade cycle can significantly influence Apple's stock price in both the near and long term. Analysts predict a strong iPhone upgrade cycle in fiscal 2025, driven by the introduction of generative AI functionality on the newest iPhones. This is expected to boost iPhone sales and revenue, which are the greatest contributors to Apple's overall revenue. A successful iPhone upgrade cycle can lead to increased investor confidence, potentially driving up Apple's stock price. However, if the upgrade cycle falls short of expectations, it could lead to a decrease in Apple's stock price.

In the long term, Apple's iPhone is expected to be the greatest contributor to its revenue over the next five years, with projected growth of 6% driven primarily by unit sales growth and modest pricing increases. A consistent and strong iPhone upgrade cycle can help Apple maintain its market share and revenue growth in the long term. However, if Apple fails to innovate and maintain a strong iPhone upgrade cycle, it could lead to a decline in market share and revenue, potentially impacting Apple's stock price in the long term.



Risks and Uncertainties Facing Apple's Stock

Despite the positive expectations for iPhone growth in fiscal 2025, Morningstar analysts believe investors would need to assume close to 20% iPhone growth to justify Apple's current share price, which is higher than their long-term fair value estimate of $185 per share. Apple continues to face growth headwinds in China, with ramped-up domestic smartphone alternatives weighing on sales. Additionally, Apple's reliance on consumer spending and the potential disruption by new devices or superapps pose risks to its stock price.

To manage these risks strategically, investors can diversify their portfolios, regularly review and rebalance their holdings, consider long-term investing, monitor competitor performance, stay informed about regulatory developments, and maintain an objective and informed perspective on Apple's stock price.

In conclusion, investors should monitor the key price levels on Apple's chart after the earnings report and keep an eye on the iPhone upgrade cycle to make informed decisions about Apple's stock price. While the iPhone upgrade cycle can significantly influence Apple's stock price in both the near and long term, investors should also be aware of the primary risks and uncertainties facing Apple's stock and manage them strategically to optimize their portfolios.