Should You Buy Apple Stock Before July 31? Wall Street Has a Clear Answer for Investors.

Key Points

• Apple will announce financial results on July 31, and most Wall Street analysts have a buy rating on the stock.

• Apple led the world is smartphone shipments in the March quarter, but delivered a lackluster performance.

• Apple is beset by headwinds related to tariffs and artificial intelligence, and the stock trades at an expensive valuation.

• 10 stocks we like better than Apple ›

Apple (NASDAQ: AAPL) is no longer the most valuable company in the world. It ceded the title to Microsoft in May, then slipped behind Nvidia in June. Apple stock has dropped 15% year to date over concerns about tariffs and its artificial intelligence strategy.

Nevertheless, most Wall Street analysts rate Apple stock a buy ahead of its third-quarter financial report, which is due after market close on Thursday, July 31. Among 51 analysts, the median target price is $236 per share, which implies 10% upside from the current share price of $214.

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Here's what investors should know.

Image source: Getty Images.

Apple is beset by headwinds related to tariffs and artificial intelligence

Apple consistently leads the market in smartphone revenue, but the company also captured the top spot in smartphone shipments in the March quarter. Nevertheless, Apple still reported unimpressive financial results. Revenue rose 5% to $95 billion and GAAP net income rose 5% to $24.8 billion.

Tariffs are a potential problem. Jefferies analyst Edison Lee says import taxes could be a 7% headwind to earnings, assuming the U.S. imposes a 10% tariff on India, a 20% tariff on Vietnam, and a 30% tariff on China. But that creates downside risk. President Trump has announced a deal with Vietnam but has not secured long-term deals with India or China.

Beyond tariffs, investors are concerned about Apple's artificial intelligence (AI) strategy or lack thereof. Many analysts touted generative AI capabilities added with Apple Intelligence as the catalyst for a major iPhone upgrade cycle, but consumers have been unimpressed. The company has also repeatedly delayed promised AI upgrades for Siri.

In addition, many analysts assumed Apple would eventually launch a paid version of Apple Intelligence with premium AI features, but the company has yet to make any such announcements. So the question remains: How will Apple monetize artificial intelligence?

Elsewhere, Apple could lose a substantial amount of services revenue depending on the outcome of an antitrust lawsuit involving Alphabet. To elaborate, a federal judge last year ruled against Alphabet, finding the company had an illegal monopoly in internet search. One remedy would be prohibiting or limiting its ability to pay Apple for default search placement on the Safari browser. That could cost Apple in excess of $20 billion per year.

What Wall Street expects from Apple in its upcoming earnings report

Apple will announce financial results for the third quarter of fiscal 2025, which ended in June, after the stock market closes on Thursday, July 31. Forecasts from Wall Street set a relatively low bar for the company. These are the consensus estimates:

• Revenue will increase 3.6% to $88.9 billion.
• Earnings will increase 1.4% to $1.42 per diluted share.

Importantly, Apple topped the consensus earnings estimate by an average of 2.5% over the [past four quarters, but shares still fell by an average of 1.2% after the past four reports. That means beating estimates is not sufficient to send the stock higher. Instead, price action following the report is likely to depend on commentary about tariffs and AI.

Finally, pricing data from options contracts currently implies a 3.5% post-earnings move. In that scenario, the stock would close between $207 and $222 on the day after the report.

Apple stock is still expensive despite falling 15% year to date

Wall Street expects Apple's earnings to grow at 6% annually through the fiscal year ending in September 2026. That makes the current valuation of 30 times earnings look expensive. That gives a price-to-earnings-to-growth (PEG) ratio above 5. Traditionally, stocks with PEG ratios above 3 are considered overvalued.

Apple introduced in the iPhone in 2007, the iPad in 2010, the Apple Watch in 2015, and AirPods in 2017. But the company has now failed to develop a groundbreaking new product for seven-plus years. Does that mean Apple has lost its ability to innovate? Without a new catalyst, be it artificial intelligence or something else, I doubt Apple stock can move sustainably higher from its current price.

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Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, Jefferies Financial Group, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.