Apple’s Stock Endures Tricky Start to 2025, What Next?

Apple's stock (NASDAQ: AAPL) has started 2025 in disappointing fashion, dropping 4.36% against a backdrop of trimmed price targets, China based tariffs, and lower than expected iPhone sales. Having moved into correction territory from it's most recent high in late December, a mini rebound that looked to be forming has been struck down by the past 5 trading sessions, where the stock has shed 5.62%.

Solid support appears to be in the $220 range, with the high $230's to $240 range proving recent resistance.

Recent earnings did beat the street's expectations, with an EPS of $2.40 (expected $2.35) and revenue of $124.30 billion (expected $124.03BN), whilst Apple supplier SkyWorks (SWKS) saw a 24.67% decline in stock yesterday on a forecasted revenue decline in it's mobile segment for the upcoming quarter.

Now it is emerging that the company is facing fresh scrutiny as China's regulatory bodies consider an investigation into the company's App Store fee structure. China's State Administration for Market Regulation (SAMR) is contemplating a probe into Apple’s policies regarding its App Store, particularly focusing on its commission model and payment service restrictions.

Apple’s App Store policies allow it to collect up to a 30% commission on in-app purchases. This has raised concerns among Chinese regulators about fairness, particularly with restrictions preventing the use of third-party payment services. Discussions on these matters have reportedly been ongoing between Apple executives and developers since the previous year, according to a report from Bloomberg News.

China's regulatory landscape has been tightening its oversight over U.S. technology companies, as evidenced by recent actions against firms like Nvidia and Google. While an official investigation into Apple is not yet confirmed, SAMR views the company’s practices as potentially disadvantageous to local developers and consumers.

Apple’s challenges are not limited to China. The company is concurrently dealing with regulatory issues in the European Union and the United Kingdom. Moreover, Apple faces diminishing performance in the Chinese market. In the first quarter of fiscal year 2025, the company's iPhone sales in China dropped by 11% compared to the previous year, tallying $18 billion.

The year may have started poorly from a stock price perspective, yet analysts seem to be unmoved, with various upgrades coming in for the firm. Apple's price target has been raised by more than 10 analysts since the recent earnings call, with the high mark of $325, and the consensus of $252 reflecting the bullish sentiment that remains.

There will be hurdles to overcome for the company, but if analysts are correct, and history is any guide, Apple usually finds a way to overcome.