Is Apple stock regaining investor confidence?

Investors are showing renewed interest in Apple (AAPL) stock, which has now risen for three consecutive days despite a broader downturn in the tech sector. This positive shift is fueled by expectations that an earlier release of an improved Siri could boost iPhone sales. Adding to the optimism, Jefferies analyst Edison Lee upgraded Apple's shares from 'Underperform' to 'Hold' and increased the price target to $188.32 from $170.63.

Lee's positive outlook is supported by Counterpoint's research, which shows that iPhone sales in the first two months of the June quarter jumped 15% year-over-year, marking the strongest growth since the third quarter of 2021. The analyst predicts that demand pulled forward by tariffs and a recovery in market share in China could lead to an approximate 8% increase in revenue and a 10% rise in earnings per share (EPS) for the June quarter. This would exceed the consensus by roughly 5% and 9% respectively, and surpass Apple's own low-single-digit revenue growth forecast.

While Lee believes a strong June quarter could stabilize the stock in the short term, he cautioned that the market's relaxed view on tariffs is "likely overly optimistic" and Apple's service revenue could unexpectedly decline. Apple is particularly vulnerable to Trump tariffs due to its extensive supply chain in China and the country's crucial role in demand. The company has reportedly implemented strategies, such as moving iPhone assembly to India, to mitigate the impact.

In recent quarters, Apple has seen robust double-digit growth in its services revenue, which has helped offset weaker performance in its device business. With this three-day rally, Apple's year-to-date losses have been reduced to about 17%.