Apple priced for optimism, but Jefferies warns Q4 may disappoint

Published 08/09/2025, 14:48

Investing.com -- Apple’s recent share price rally has baked in optimism around regulatory relief and future AI products, but Jefferies analysts cautioned that fourth-quarter results could fall short of expectations.

In a research note, Jefferies said Apple’s stock has risen 18% over the past three months, boosted by “tariff relief, US antitrust remedies, and AI-driven Siri service in ’26.” 

However, the firm stressed that its “fundamental concerns are unchanged: saturated smartphone market, lack of tech innovations, and rising BOM costs for AI, but with uncertain demand.”

Jefferies was downbeat on Apple’s forthcoming flagship, writing: “We remain unexcited about iPhone 17 despite a positive US consumer survey.” 

The firm warned that “pull-in demand in 3QFY25 could lead to a miss in 4QFY25,” with its revenue and EBIT estimates 5% and 7% below consensus.

The analysts highlighted three developments shaping sentiment. First, the U.S. District Court’s remedies decision in Google’s antitrust case means “GOOG could still pay AAPL for the latter to use its search engine, but it cannot be exclusive.” 

Jefferies cautioned that Apple’s $20 billion annual revenue stream “may be less” under the new arrangement, with offsetting contributions from rivals such as Bing uncertain.

Second, Apple is set to launch an AI-driven Siri service in 2026, based on a customised version of Google’s Gemini large language model. 

Jefferies noted this suggests Apple “is not re-inventing the wheel,” but questioned whether the company has enough app data to make its own smaller model effective.

Finally, while surveys show strong U.S. intent to upgrade to iPhone 17, Jefferies said Apple remains “unattractive” at “30x FY26E PE vs 15% CAGR.”

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.