How Apple’s share price reacts post-earnings: key trends for investors

(AI summary)

Apple’s upcoming earnings announcement

Apple is set to report its fourth quarter (Q4) earnings on Friday, 1 November at 7.30am (AEDT). Each earnings release triggers share price movements shaped by market sentiment, revenue results, and guidance. This analysis reviews Apple’s post-earnings price behaviour over the past six quarters, highlighting immediate, short-term, and medium-term price reactions, with investor implications.

China concerns and AI investments shape Apple’s outlook

Apple remains a key focus for investors, driven by its market influence and growth prospects. Concerns around Apple’s performance in China and market challenges have increased, with mixed data from the region and a reported cut in iPhone 16 production raising demand questions. This uncertainty has weighed on Apple’s stock, leading to underperformance relative to the S&P 500 year-to-date

Despite these challenges, Apple is advancing its artificial intelligence (AI) capabilities and expanding high-margin services, balancing innovation with measured research and development (R&D) spending. Its strong capital return program, including an estimated $25 billion in share buybacks this quarter, continues to attract investors. Analysts maintain a 'moderate buy' rating, with a price target showing potential upside.

Key financials

Expectations for Q4 2024

• Adjusted earnings per share (EPS): $1.593
• Revenue: $94.215 billion
• Net income: $24.239 billion
• EBITDA: $32.851 billion

Comparison to Q3 2024

• Revenue: $85.8 billion
• Revenue growth: 5% year-on-year (YoY)
• EPS: $1.40

Post earnings performance analysis

• Immediate reactions (one day)

The day after Apple’s earnings announcements often sees notable price shifts as investors digest results and guidance. In some quarters, like the first quarter (Q1) 2023 and Q1 2024, Apple’s share price surged by around 6% on day one, driven by investor optimism from positive results. In contrast, second quatrter (Q2) 2023 saw immediate declines, reflecting disappointment or caution.

• Short-term adjustments (one week)

During the week following earnings, Apple’s share price varies as the market reassesses results. In Q1 2023 and Q1 2024, gains held and rose, showing sustained confidence. However, in Q2 2023, the stock fell over the week, indicating weaker-than-expected earnings. These adjustments signal if the market views results as temporary or indicative of a trend.

• Medium-term trends (one month)

One month after earnings, Apple’s price movements reflect broader investor sentiment. In quarters like Q1 2023 and Q1 2024, robust gains continued, supported by favourable conditions. In contrast, the Q2 2023 decline extended, suggesting the market needed more time to adjust. This period shows whether Apple’s performance meets long-term expectations.

• Overall patterns

Apple’s post-earnings movements reveal a pattern: positive quarters (Q1 2023, Q1 2024) see gains across day, week, and month, while negative quarters, like Q2 2023, show ongoing pressure. Apple’s immediate post-earnings movement often indicates short to medium-term direction. 2023

• Implications for investors

Apple’s post-earnings trends underscore the importance of monitoring results and guidance closely. Short-term investors may benefit from day-one or one-week movements, especially in positive quarters. For medium to long-term holders, one-month trends offer a deeper market perspective on Apple’s performance. Understanding these price reactions can help identify entry and exit points for both traders and long-term investors.

Apple's post-earnings performance chart