Shares of Apple fell about 2.5% Thursday morning despite a stellar earnings report on Wednesday that saw the company notch record quarterly profits of $28.76 billion.
The fall in share prices will likely come as a surprise to many analysts who were impressed by the quarter’s performance.
Revenues were a standout for the three months that ended in December, as Apple‘s iPhone sales handily beat analyst expectations, rising 17% year-over-year.
The Cupertino-based tech giant turned in an all-time high of $111.4 billion in total sales for the quarter, marking a 21% year-over-year jump.
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Analyst Daniel Ives at Wedbush called the quarter a “jaw-dropper” in a note to clients late Wednesday.
Ives highlighted services revenue, which once again came in ahead of expectations at $15.76 billion, up 24% year-over-year. He also noted the importance of revenue out of China for Apple‘s future and reported, “considerable strength from the China region thus far with positive trends heading into 2021.”
Analyst Rod Hall, CFA, said Apple reported a “very strong” quarter and noted the success of the company’s wearable division, which saw revenues increase 30% year-over-year to $13 billion.
Hall and company maintained their “sell” rating on Apple but raised their price target to $83 per share from $80 after the solid results sighting an “elongating replacement cycle thesis” as reasoning for their continued bearishness.
Essentially the analysts believe customers aren’t replacing their iPhones at the same rate they once did, which Goldman believes will hurt revenues in the long term.
Apple currently boasts 77 “buy” ratings, 15 “neutral” ratings, and just three “sell” ratings from analysts.
Shares of the company traded at $138.37 as of 9:59 AM EST Thursday morning.
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