Apple ( AAPL Quick Quote AAPL - Free Report) is rumored to announce third-generation AirPods on May 18, per 9TO5 Mac, which cited a report by APPLETRACK. The upcoming AirPods are rumored to be a mixture of the original AirPods and the AirPods Pro designs. The devices are expected to be almost similar to AirPods Pro with shorter stems, a shorter charging case and rearranged sensors. Moreover, apart from AirPods, the iPhone-maker is also speculated to launch Apple Music HiFi, which refers to high-quality lossless audio streaming option for Apple Music subscribers. Markedly, HiFi tiers are already offered by music streaming services like Deezer and Tidal. Apple’s closest peer, Spotify ( SPOT Quick Quote SPOT - Free Report) , is also expected to launch a higher quality tier. Notably, Apple is relying on its portfolio strength to drive growth. Last month, the company launched a new iPad Pro, along with a redesigned iMac, AirTags, Apple TV 4K, and a revamped credit card offering. Apple also unveiled a new purple finish for the iPhone 12 and iPhone 12 mini lineup, which will ship with iOS 14.5 and enable users to unlock iPhone with Apple Watch while wearing a face mask. Apple’s product sales (81.1% of sales) surged 61.6% year over year to $72.68 billion in the second quarter of 2021. Non-iPhone revenues (iPad, Mac and Wearables) grew 54.6% on a combined basis. Further, Services (18.9% of sales) revenues grew 26.6% from the year-ago quarter to $16.90 billion.
Markedly, Apple’s shares are down 3.9% year to date compared with the S&P 500 composite’s return of 11.7%. The company’s share price is expected to rebound, given its expanding device portfolio and Service offerings.
Apple now expects revenues to grow double digits year over year but decline sequentially. Supply constraint (primarily iPad and Mac) is expected to hurt second-quarter sales by $3-$4 billion. Moreover, gross margin is expected between 41.5% and 42.5% in the March quarter. Operating expenses are expected between $11.1 billion and $11.3 billion. Zacks Rank & Other Stocks to Consider
Apple currently has a Zacks Rank #2 (Buy).
Alphabet ( GOOGL Quick Quote GOOGL - Free Report) and Digital Turbine ( APPS Quick Quote APPS - Free Report) are some other top-ranked stocks in the broader technology sector. Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Long-term earnings growth rate for Alphabet and Digital Turbine is currently pegged at 18.1% and 50%, respectively. Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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