Apple Inc.

Apple Inc. (NASDAQ: AAPL) develops, produces, and sells smartphones, personal computers, tablets, wearables, and accessories, while also offering a wide range of related services. The company’s product portfolio spans iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software ecosystem covers iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Additionally, Apple provides services such as advertising, AppleCare, cloud solutions, digital content, and payment services.

As per previous Kalkine’s American Tech Report published on ‘AAPL’ on May 13, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 210.79 based on fundamental analysis and the stock price has now moved up by ~ 19.71% since then and has breached resistance level 2.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Regulatory and Legal Pressures: Apple faces mounting scrutiny from regulators worldwide. The U.S. Department of Justice has filed a civil antitrust lawsuit alleging monopolistic practices in the smartphone market, while similar claims are being pursued in state and federal courts. In Europe, the company has been fined €500 million under the Digital Markets Act and remains under investigation, with potential penalties of up to 10% of global revenue. Additionally, Apple continues to battle Epic Games in a long-running dispute over App Store practices, exposing it to further legal and compliance risks. These proceedings could lead to restrictions on business practices, financial penalties, and reputational damage.
• Macroeconomic and Trade-Related Headwinds: The company’s performance is being challenged by unfavorable macroeconomic conditions. Inflationary pressures, rising interest rates, and currency fluctuations are directly weighing on results and could materially affect profitability going forward. New U.S. tariffs on imports from countries such as China, Japan, South Korea, and members of the European Union have increased supply chain costs and pressured gross margins. Furthermore, retaliatory tariffs and geopolitical frictions pose ongoing risks to consumer demand and international sales.
• Margin Pressures and Sales Weakness: Apple reported declines in key product categories. Net sales for Wearables, Home, and Accessories decreased year-over-year due to lower demand. Moreover, gross margin for products contracted as tariffs and an unfavorable product mix outweighed cost benefits. While services margins improved, the volatility in product margins highlights the company’s vulnerability to cost pressures and reliance on high-volume device sales for overall profitability.
• Escalating Costs and Expense Growth: The company’s operating expenses continued to rise. Research and development spending increased due to higher headcount and infrastructure costs, while selling, general, and administrative expenses also grew on the back of variable selling costs. This upward trend in expenses, even as certain product categories face declining sales, suggests mounting pressure on operational efficiency. Additionally, heavy reliance on stock-based compensation—totaling USD 9.7 billion for the first nine months—creates further strain on earnings.
• Seasonality and Dependence on Flagship Products: Apple’s business remains heavily seasonal, with outsized reliance on first-quarter holiday sales. New product launches significantly influence quarterly performance, often leading to fluctuations in channel inventory and consumer demand. The company continues to depend heavily on iPhone revenues, which comprised the majority of net sales in Q3 FY25. This dependence on a single product line leaves Apple exposed to competitive threats, demand shifts, and regulatory challenges affecting its core market.

Valuation (Using Price/Earnings Per Share Multiple)

Share Price Chart

Conclusion

Apple faces mounting challenges as regulatory and legal pressures intensify, including U.S. antitrust lawsuits, a €500 million EU fine, and ongoing disputes with Epic Games. At the same time, macroeconomic headwinds such as inflation, currency fluctuations, and new tariffs are straining supply chains and compressing product margins. Weaker sales in categories like Wearables and a heavier expense base, driven by rising R&D and administrative costs, further weigh on performance. Combined with seasonality and its heavy reliance on iPhone revenues, these factors underscore the company’s vulnerability to both external risks and internal cost pressures

Based on the notional gains, valuation downside and price action stance, a "Sell" recommendation on Apple Inc. (NASDAQ: AAPL) has been given at the current market price of USD 252.34 as on 24 September 2025 at 8:05 am PDT.

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 level is 24 September 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: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.