Apple Inc.

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software platforms include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Its services include advertising, AppleCare, cloud services, digital content and payment services.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• AAPL's share price has corrected by 7.40% in the past three months. Similarly, a correction of 15.82% over the YTD basis.

• The stock is leaning towards the lower band of its 52-week range of USD 260.10 and 52-week low price of USD 169.21, with the current price near an important support area of USD 190.00- USD 200.00, therefore an expectation of upward movement if the levels sustain.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 54.92, slightly upward moving, with expectations of upward momentum.

1.2 The Key Positives, Negatives, and Investment summary  

1.3 Top 10 shareholders:

The top 10 shareholders together form ~28.80% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc. And BlackRock Institutional Trust Company, N.A., are the biggest shareholders, holding the maximum stake in the company at ~9.34% and ~4.92%, respectively.

1.4 Key Metrics:

Apple Inc. showcased a robust financial performance from FY23 to FY24, with key profitability metrics reflecting operational excellence despite a slight decline in return on invested capital. The gross profit margin improved from 44.13% to 46.21%, indicating enhanced cost efficiency in production, while the EBITDA margin rose from 32.83% to 34.44% and the operating margin increased from 29.82% to 31.51%, underscoring Apple’s ability to optimize operations and drive higher earnings. The income before tax margin edged up from 29.67% to 31.58%, though a higher income tax rate of 15.79% in FY24 (up from 14.72%) moderated the net margin growth to 26.59% from 25.31%, reflecting a slight increase in tax burdens. Return on average common equity improved marginally from 171.95% to 174.62% and return on average total assets rose from 27.50% to 28.98%, demonstrating stronger returns for shareholders and better asset utilization, though return on invested capital dipped slightly from 58.02% to 55.35%, possibly due to increased capital investments like the USD 500 billion U.S. expansion plan, highlighting a trade-off between growth initiatives and capital efficiency. Overall, Apple’s financial health remains strong, with significant improvements in profitability and returns, tempered by minor challenges in tax and capital metrics.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q2FY25:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• AAPL's share price has corrected by 7.40% in the past three months. Similarly, a correction of 15.82% over the YTD basis.

• The stock is leaning towards the lower band of its 52-week range of USD 260.10 and 52-week low price of USD 169.21, with the current price near an important support area of USD 190.00- USD 200.00, therefore an expectation of upward movement if the levels sustain.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 54.92, slightly upward moving, with expectations of upward momentum.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 12, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.