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Don’t Buy Apple Stock Until You See This (July 30)
Should You Buy Apple Stock Before Its Big Earnings Report? A Simple Guide
Image source: Getty Images.
What’s Happening?
Mark your calendar: Apple (NASDAQ: AAPL) reports its fiscal third-quarter results after the market closes on Thursday, July 30. An earnings call follows an hour later.
Why it matters: Stocks often jump or drop sharply after earnings announcements. Apple is no exception. But if you’re a long-term investor, you don’t have to rush in before the news. Let’s break down the “bull” (optimistic) and “bear” (cautious) cases so you can decide what’s right for you.
The Bull Case: Why Some Say “Buy Now”
| Positive Sign | What It Means (ELI5) |
|---|---|
| Revenue growth accelerating | Apple’s sales have grown faster for 3 years in a row. Last quarter: +17% (best since late 2021). |
| Profits growing even faster | Earnings per share (profit per slice of ownership) jumped +22%. |
| Broad-based strength | Double-digit growth in every geographic region (Americas, Europe, China, etc.). |
| Services hitting records | High-margin revenue from App Store, iCloud, Apple Music, etc., at an all-time high. |
| New products selling well | iPhone 17 line strong; new entry-level MacBook Neo popular without cheapening the brand. |
| Analysts optimistic | Wall Street expects +16% revenue and +20% profit this quarter. |
| History of beating expectations | Apple has surpassed profit forecasts by 3–10% every quarter for the past year. |
| Stock momentum | Shares hit a new all-time high Monday, up 58% over the past year. |
| Company betting on itself | Board approved $100 billion in new stock buybacks (buying back its own shares = signal of confidence). |
Key Takeaway: Momentum is real, fundamentals are strong, and Apple keeps exceeding expectations.
The Bear Case: Why Some Say “Wait”
Important: The author (Rick Munarriz) has owned Apple long enough to turn a $1 investment into $14 (a “14-bagger”)—but he is NOT buying this week.
1. The “Cyclical Trap” – Growth Comes in Spurts
Since Steve Jobs passed away in 2011, Apple has never posted double-digit revenue growth two years in a row. Look at the rollercoaster:
| Fiscal Year | Revenue Growth |
|---|---|
| 2012 | +45% |
| 2013 | +9% |
| 2014 | +7% |
| 2015 | +28% |
| 2016 | -8% |
| 2017 | +6% |
| 2018 | +16% |
| 2019 | -2% |
| 2020 | +6% |
| 2021 | +33% |
| 2022 | +8% |
| 2023 | -3% |
| 2024 | +2% |
| 2025 (est.) | +6% |
Lesson: Big growth years are usually followed by slow (or negative) years. This pattern has happened 14 years running.
2. Valuation Is Stretched
- Apple now trades at ~35× next year’s estimated earnings.
- Translation: You’re paying a premium price for a company that historically sees growth fade after a good year.
- Risk: If Thursday’s report (or guidance) isn’t perfect, the stock could drop sharply because so much good news is already priced in.
Expert Opinion: Motley Fool’s Stock Advisor
The Motley Fool’s flagship service did not include Apple in its current “10 Best Stocks” list.
- Track record: Their picks have beaten the S&P 500 by 4× over time.
- Examples:
- Netflix (picked Dec 2004): $1,000 → $377,990
- Nvidia (picked Apr 2005): $1,000 → $1,269,518
- Takeaway: There may be better opportunities elsewhere right now.
How to Decide: 5 Steps for You
- Check your timeline – Investing for 5+ years? Short-term earnings noise matters less.
- Assess your risk tolerance – Can you handle a 10–15% drop if the report disappoints?
- Look at your portfolio – Do you already own a lot of Apple? (Many index funds hold ~6–7%.)
- Consider dollar-cost averaging – Buy a little now, a little after earnings, a little next month. Smooths out the volatility.
- Read the actual report Thursday night – Revenue, earnings, and management’s commentary on iPhone 17 cycle, China, AI features, and Services margin.
Remember: No one—including analysts—knows exactly how the stock will react Friday morning.
Summary
| Factor | Bull View | Bear View |
|---|---|---|
| Recent Results | 17% revenue, 22% EPS growth | Past peak growth hasn’t repeated |
| Guidance/Estimates | 16%/20% growth expected | History says next year could slow |
| Valuation | Buybacks show confidence | 35× forward P/E = priced for perfection |
| Technical | All-time high, 58% 1-year gain | Momentum can reverse fast on earnings |
| Expert Picks | Fool still recommends Apple | Not in Fool’s “Top 10” right now |
Bottom line: Apple is a fantastic company, but the stock’s short-term risk/reward around this earnings report leans cautious. Long-term believers can stay the course; new money might wait for the dust to settle.
FAQ
1. What does “fiscal third quarter” mean for Apple?
Apple’s fiscal year ends in September. So Q3 = April–June. They report it in late July.
2. What’s a “buyback” and why does it matter?
A buyback = company uses cash to buy its own shares. Fewer shares outstanding → each remaining share owns a bigger piece of profits. Usually signals management thinks the stock is undervalued.
3. What’s a “14-bagger”?
Slang for an investment that grew 14× (e.g., $1,000 → $14,000). “Baggers” come from Peter Lynch; “10-bagger” = 10×.
4. Why does Apple’s growth oscillate so much?
iPhone “super-cycles” (major redesigns/5G) drive big upgrade years, followed by lighter refresh years. Services smooth it out but not enough to stop the swing.
5. Should I sell my Apple shares before earnings?
If you’re a long-term holder (5+ years), selling to avoid a few days of volatility usually backfires—taxes, missed dividends, and timing risk. Most advisors say stay invested, but don’t add aggressively right before a binary event unless you’re comfortable with the swing.
Disclosure: Rick Munarriz owns Apple. The Motley Fool owns and recommends Apple. This article is for informational purposes only—not personalized investment advice.
