It’s the end of an era for Apple Inc (NASDAQ:AAPL) with next week’s third-quarter earnings report on July 30, the last with Tim Cook as CEO. An analyst highlights what to watch for ahead of the highly anticipated earnings.

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The Apple Analyst

BofA Securities analyst Wamsi Mohan reiterated a Buy rating on Apple stock with a price target of $380.

The Analyst Takeaways

Apple should report a strong June quarter, Mohan writes in a new investor note.

"Overall builds are likely strong, but we are taking a conservative approach; iPhone launch cadence can change some seasonality, which we are reflecting," Mohan said.

The analyst said investor focus for the quarterly results will be on gross margins, cost inflation and the end of Cook’s run as CEO for Apple.

Mohan sees Services strength offsetting App Store weakness for the quarter.

"We model Services gross margins at 76.5% for the June quarter and then holding steady at 76% for the September and December quarters. Over time, we see the potential for Services gross margins to grow to 80% and overall company gross margins to grow to 50%."

For Apple’s iPhone segment, Mohan is conservative on future quarters and could see revenue growth declining "given the cadence of iPhone launches this year."

"Investor questions focus on sustainability on strong iPhone demand and whether the ‘supercycle’ thesis can really play out."

Mohan says AI features and an aging installed base are expected to drive iPhone demand, but investors worry about whether demand has already peaked.

Apple Stock Price Action

Apple stock is down 2.5% to $325.54 on Monday versus a 52-week trading range of $201.50 to $334.98. Shares hit all-time highs last week and are up over 50% in the past 52 weeks.

Photo: Tim Cook, Shutterstock; Apple iPhone 16e, courtesy Apple