Wall Street is eager to see some sign that AI is driving iPhone demand in Apple's latest earnings report

• Apple is set to report fiscal fourth-quarter earnings results after the market close on Wednesday.
• Wall Street anticipates $94.36 billion in revenue and adjusted earnings per share of $1.60.
• Analysts predict mixed results and want to see if AI features will boost future iPhone demand.

All eyes are on Apple, the world's largest company by market value, as it prepares to report its fiscal fourth-quarter results after the market closes on Wednesday.

The quarter, which ended September 30, will encapsulate two weeks of Apple's iPhone 16 lineup sales.

The stock was trading at $230.40 at 1:50 p.m. ET, down by about 1.4%.

Here's what Wall Street expects Apple to report for its fiscal fourth-quarter, according to Bloomberg data:

• Revenue: $94.36 billion
• Adjusted earnings per share: $1.60

Wall Street will largely be looking to the company's guidance for the upcoming holiday months, which has historically represented Apple's strongest quarter.

Top of mind for analysts who cover the stock is whether Apple's AI efforts will pay off and fuel demand for the iPhone 16, or if consumers are taking a wait-and-see approach.

The company released its first round of "Apple Intelligence" features this week, about six weeks after the release of the iPhone 16. Meanwhile, Apple's core AI features aren't expected to be released for the iPhone until early next year.

Here's what Wall Street is looking for in Apple's upcoming earnings report.

Bank of America: 'Look past the iPhone 16 noise'

With some conflicting views on Wall Street about iPhone 16 demand in recent weeks, Bank of America said investors should "look past the iPhone 16 noise to impact of Apple Intelligence."

"Contrary to every cycle where all the hardware/software functionality is more or less static through the course of the cycle, we view the cycle as more dynamic with more material software updates that increases the value to the user," Bank of America analyst Wasmi Mohan said in a note last week.

Mohan said iPhone demand to pick up over the next few months as Apple's AI features become more robust and expects the company to sell 80 million iPhone units during the holiday season.

Mohan is encouraged by a slightly higher average selling price for iPhones as consumers overwhelmingly continue to gravitate towards the more expensive Pro models.

Bank of America rates Apple at "Buy" with a $256 price target.

JPMorgan: Expect a beat on results but a miss on guidance

JPMorgan expects Apple to report a strong fourth-quarter earnings report that will likely beat revenue and profit estimates but that it will also disappoint with weaker-than-expected guidance for the holiday quarter.

"Sell-through for iPhone 16 series started off slower than iPhone 15, and while momentum has improved in recent weeks, the magnitude of the improvement is still putting volumes modestly below last year," JPMorgan analyst Samik Chatterjee said in a Monday note.

Like many analysts on Wall Street, Chatterjee is looking for evidence that AI features will drive a bump in iPhone sales.

JPMorgan rates Apple at "Overweight" with a $265 price target.

Wedbush: Apple will be a $4 trillion company next year

Wedbush analyst Dan Ives isn't budging from him bullish view on Apple heading into the company's financial results. He argues that the iPhone is on the verge of a supercycle as consumers upgrade their phones to get access to Apple Intelligence features.

"We expect a strong iPhone performance for the September quarter and expect a relatively bullish December iPhone demand commentary from Cook & Co. despite many of the bears recently yelling fire in a crowded theater on the strength of iPhone 16 sales," Ives said in a note on Sunday.

Ives says that bearish views on Apple fail to appreciate its installed base of 1.5 billion iPhones that will eventually need to be replaced, as well as the growing Services business that helps monetize the massive user base, and the potential for Apple to be the gatekeeper of AI technologies to a large group of people.

Wedbush rates Apple at "Outperform" with a $300 price target.

Goldman Sachs: 'We see upside to consensus'

Goldman Sachs said it sees "upside to consensus revenue and EPS driven by outperformance in iPhone and Services" in a note last week.

Goldman analyst Michael Ng expects the company to report $1.61 in earnings per share and $94.5 billion in revenue, which would represent year-over-year growth of 6%.

Like other analysts, Ng is focused on the impact of AI and all of the software features Apple is set to release in the next few months.

"Although Apple Intelligence has yet to be a demand driver, we're encouraged by the rollout of Apple Intelligence features with iOS 18.1 (Week of October 28, includes Writing Tools, notification summaries, Clean Up in Photos), iOS 18.2 (currently in beta for est. December release, includes Genmoji, Image Playground, ChatGPT), and iOS 18.4 (est. March 2025 release, more advanced Siri, personalization, on-screen awareness)," Ng said.

Goldman Sachs rates Apple at "Buy" with a $275 price target.

Read the original article on Business Insider