Apple Earnings Disappointment Sends Stock Lower Despite Revenue Beat
Apple earnings disappointment was the headline takeaway after the tech giant released its fiscal Q2 results yesterday. Despite beating Wall Street’s top-line expectations, shares of Apple (AAPL) dropped in after-hours and continued lower during Friday’s session. The culprit? Weak iPhone sales and soft guidance that fell short of investor hopes.
Apple Beats on Revenue, But Misses Where It Matters
According to CNBC’s earnings report, Apple reported revenue of $90.8 billion, slightly ahead of consensus estimates. However, the company reported a 10% year-over-year decline in iPhone sales, which make up over half of its total revenue. Services revenue grew by 14%, which was a bright spot, but it wasn’t enough to offset concerns over hardware performance.
The disappointment in Apple’s earnings is largely tied to this contraction in hardware growth, particularly as competitors in China continue to chip away at the iPhone market share. While CEO Tim Cook cited strong performance in emerging markets and expressed confidence in the upcoming product pipeline, investors were clearly hoping for more robust signs of a turnaround.
Forward Guidance Raises Red Flags
Another factor contributing to Apple’s earnings disappointment was the company’s forward guidance. Apple provided vague commentary about the current quarter, suggesting only a “slight improvement” in year-over-year revenue. That lukewarm outlook signaled to traders that the near-term upside might be limited, particularly with macroeconomic headwinds like inflation and shifting consumer behavior still in play.
Morgan Stanley and Goldman Sachs Analysts trimmed their price targets in response to the guidance, adding more downward pressure on the stock. Despite Apple’s largest-ever $110 billion share buyback authorization, the market viewed this as a defensive move rather than a catalyst for renewed growth.
How Traders Are Responding
In the TraderInsight War Room, immediate downside setups emerged right at the open. Apple traded below the VWAP and continued to reject intraday resistance zones. Several traders used volatility band reversals and opening gap reversion strategies to short the stock successfully within the first hour of the session.
Yesterday’s live stream webinar also touched on using confidence intervals to fade post-earnings overreactions—a tactic that played out perfectly in AAPL. The Apple earnings disappointment was a textbook example of sentiment-driven price action decoupling from fundamentals.
What to Watch Going Forward
In the future, traders will watch for signs of stabilization around the $170 level, a key technical support since March. If that level fails, the next support sits near $165, which aligns with a 2SD deviation from the mean on the daily chart.
Longer-term investors may need a meaningful uptick in hardware sales or new product announcements—potentially in the AI or AR/VR—to reignite bullish momentum. Until then, expect continued volatility and headline-driven movement.
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The Apple earnings disappointment reminds us that even the biggest names in tech aren’t immune to market skepticism. For active traders, that spells opportunity—especially when paired with a plan like the ones we teach at TraderInsight.