Apple’s (AAPL) upcoming Worldwide Developers Conference (WWDC), beginning June 9, is quickly becoming one of the most closely watched events on the tech calendar, with investors and analysts anticipating significant announcements that could reshape the company’s near-term outlook. According to Goldman Sachs, the tech giant is expected to showcase substantial advancements in artificial intelligence (AI) capabilities and unveil significant updates across its core operating systems, presenting a compelling catalyst for the stock.

In this article, we’ll take a closer look at why Goldman Sachs remains bullish on Apple ahead of WWDC, examine recent developments, including tariff threats from U.S. President Donald Trump, analyze the company’s financials, and explore what investors can expect next. With that, let’s dive in!

About Apple Stock

Founded in 1976, tech giant Apple (AAPL) has consistently set the benchmark in the technology sector. The company’s lineup includes flagship products like the iPhone, MacBooks, Apple Watch, AirPods, and iMacs — all integrated within the ecosystem of its highly profitable Services business. AAPL’s market cap currently sits at $2.99 trillion, making it the third-largest company in the world.

Shares of the iPhone maker have slumped 20% on a year-to-date basis.

Trump Threatens Tariffs on Apple

Last Friday, U.S. President Donald Trump reignited his trade war, expanding its scope from countries to specific companies. President Trump threatened to impose a 25% tariff on iPhones manufactured outside the U.S., regardless of whether they are made in China or India. “I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump said in a post on his Truth Social network. 

With that, Apple finds itself in a no-win situation. Producing iPhones in the U.S. would likely be extremely costly, resulting in price points that many consumers could no longer afford. CNBC previously reported that retail price estimates for a U.S.-manufactured iPhone range from $1,500 to $3,500. Analysts also pointed out that relocating the production line to the U.S. is unrealistic due to the complexity involved. At the same time, continuing with the plan to use Indian manufacturers risks triggering tariffs, which could lead to steep price hikes and weaken consumer demand.

Meanwhile, analysts suggested it would likely be more practical for Apple to absorb the cost rather than shift production to the U.S. “In terms of profitability, it’s way better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to the US,” Apple supply chain analyst Ming-Chi Kuo wrote on X. Also, UBS analyst David Vogt described the potential 25% tariffs as a “jarring headline” but noted they would represent only a “modest headwind” to Apple’s earnings, reducing annual EPS by $0.51 compared to a previous estimate of $0.34 under the current tariff landscape. 

Other Wall Street analysts from top firms like JPMorgan, Goldman Sachs, and Citigroup view the tariff threat as unlikely to pose a significant long-term concern. They believe Apple’s pricing power, global reach, and strong brand loyalty provide it with sufficient flexibility to navigate the risk effectively.

Overall, if the tariffs are imposed, they could severely undermine the company’s fundamentals. However, I believe Trump’s threats are unlikely to materialize, as moving production to the U.S. is literally impossible to achieve overnight or even within a few years. For instance, Wedbush’s Dan Ives estimates that relocating just 10% of the company’s production to the U.S. would cost approximately $300 billion over the next three years. Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, said, “It would be probably a surprise to most investors if this actually happens.” With that, Apple isn’t going anywhere, and I believe the current uncertainty is likely to ease in the near term.

Goldman Sachs Sees Major Catalyst Ahead for AAPL Stock

Although recent tariff threats may have rattled investors, Goldman Sachs believes a significant catalyst lies ahead for Apple stock. Apple is set to host its annual Worldwide Developers Conference on June 9, and Goldman Sachs anticipates key updates on artificial intelligence advancements and improvements to its operating system designs. The firm maintains a “Buy” rating and a $253 price target on AAPL stock ahead of the event. 

“We expect AAPL to demonstrate continued progress toward incorporating AI into its operating systems through developer access to its AI models for app development … as well as the potential announcement of Gemini AI integration on iPhones given Alphabet CEO Sundar Pichai’s recent comments regarding hopes to finalize a partnership with Apple by mid-2025,” Goldman Sachs analyst Michael Ng wrote in a note. Still, Ng said that the tech giant will need to show additional progress with Apple Intelligence “(e.g., late 2025/26 features including AI-enhanced Siri, on-screen awareness, personal context)” before investors are ready to view it as a meaningful “demand driver.”

The analyst said that Apple’s various operating systems — iOS, iPadOS, macOS, watchOS, tvOS, and visionOS — are expected to receive design updates that standardize user interfaces across devices. Notably, reported design updates include features like rounded app icons, a floating tab bar, and more translucent app interfaces. Ng also expects iOS 19 to introduce several convenience-focused features, such as public Wi-Fi access syncing, AI-driven battery optimization, and more. In addition, he expects improvements to Apple’s digital assistant, Siri, along with the possibility of the company making its large language models accessible to app developers. Ng believes that all of these will improve the user experience, strengthen customer retention, and boost Apple’s competitive position.

Compared to last year’s WWDC, which focused on lock-screen widgets and privacy upgrades, this year’s event could represent Apple’s most significant AI push to date, potentially rivaling Google’s I/O showcase from early May.

How Did Apple Perform in FQ2?

On May 1, Apple reported financial results for the second quarter of fiscal 2025. Despite posting better-than-expected headline figures, AAPL stock dropped more than 3% in the following trading session as the company failed to ease investor concerns over key challenges, such as rising tariff costs and a slowdown in China. With that, let’s briefly consider key numbers. 

The Cupertino-based behemoth’s total revenue grew 5% year-over-year to $95.4 billion, beating Wall Street’s consensus by $840 million. Product sales totaled $68.7 billion, up 3% year-over-year. The majority of product revenue came from iPhone sales, which rose 2% year-over-year to $46.84 billion, exceeding projections. The growth was primarily driven by increased net sales of the Pro models. Mac and iPad revenue also surpassed expectations, driven by successful product launches and upgrades. Still, the real driver of top-line growth was the Services segment, which generated $26.7 billion in revenue — up 12% year-over-year — and now represents approximately 28% of total revenue. The segment’s revenue, however, slightly missed forecasts. 

On the profitability front, operating margin improved by about 80 basis points to 31% in Q2, resulting in operating income of $29.6 billion. The expanding profitability was primarily driven by disciplined operating expense management. As a result, AAPL posted GAAP EPS of $1.65, up 8% year-over-year and beating expectations by $0.03.

Meanwhile, Apple returned $29 billion to shareholders in Q2, including $25 billion through share repurchases and $3.8 billion through dividend payments. The company also unveiled a $100 billion share repurchase program and raised its dividend by 4% to $0.26 per share.

Now let’s turn to the negatives. Sales in Greater China dropped 2.3% year-over-year to $16 billion in Q2, falling short of analysts’ expectations. Notably, the company is facing intense market competition, especially from Huawei. Moreover, the latest flagship iPhones aren’t significantly different from previous models and largely feature the same AI capabilities as the 2023 iPhone 15 Pro. As a result, consumers have had less incentive to upgrade. In addition, CEO Tim Cook stated during the earnings call that if tariffs remain at current levels, they would raise Apple’s costs by approximately $900 million in Q3. Those are the main factors that contributed to the post-earnings drop.

Looking ahead, management anticipates modest year-over-year revenue growth in the low to mid-single digits for Q3, translating to a revenue range of approximately $87 billion to $90 billion.

AAPL Valuation and Analysts’ Estimates

Analysts tracking the company foresee a modest 6.54% year-over-year increase in its EPS to $7.19 for fiscal 2025, with revenue expected to grow 4.12% year-over-year to $407.16 billion. Notably, analysts have been lowering their estimates due to ongoing tariff-related uncertainty. Consensus estimates for Apple’s FY25 earnings and revenue have each been revised downward 29 times over the past three months.

In terms of valuation, AAPL’s forward P/E ratio (Non-GAAP) stands at 27.84x, which is roughly in line with its five-year average of 28.73x. Overall, I believe the stock’s valuation is reasonable, as much of the negatives appear to be already priced in. With that, any positive news is likely to trigger multiple expansion, which should be reflected favorably in AAPL’s stock price.

What Do Analysts Expect for AAPL Stock?

Despite the ongoing uncertainty, most Wall Street analysts continue to hold a bullish outlook on Apple. Of the 37 analysts covering the stock, 18 rate it a “Strong Buy,” four call it a “Moderate Buy,” 12 recommend holding, one suggests a “Moderate Sell,” and two assign a “Strong Sell” rating. This translates to a “Moderate Buy” consensus rating. The average price target for AAPL stock is $231.02, suggesting potential upside of roughly 15% from current levels.

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.