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Apple's Strong Revenue Guidance Came Despite Mac Supply Constraints, Wedbush Says

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Apple's (AAPL) fiscal third-quarter revenue guidance was well above Wall Street's estimates despite supply constraints for Mac models that will likely continue for several months, Wedbush Securities said Friday.

Late Thursday, the technology giant said it expected 14% to 17% annual revenue growth for the June quarter. Wedbush put the consensus view at 9%.

The strong guidance was the "highlight" of the company's earnings conference call, Wedbush analyst Dan Ives said in a note to clients.

"The iPhone 17 supercycle continues to gain momentum across nearly every major geography, setting up significant momentum heading into the iPhone 18 launch in September," Ives wrote.

Apple shares were up 4.2% in Friday afternoon trade. The stock has increased 3.9% so far this year.

Wedbush raised its fiscal third-quarter revenue outlook for Apple to $108.16 billion from $100.03 billion. The FactSet-polled consensus is for $106.23 billion.

"The majority of our supply constraints (in the June quarter) will be on several Mac models, given the continued high levels of demand that we're seeing and we have less flexibility in the supply chain than we normally would," Chief Executive Tim Cook told analysts during an earnings call late Thursday, according to a FactSet transcript.

"The Mac mini and the Mac Studio may take several months to reach supply/demand balance," Cook added.

Apple's second-quarter results topped the Street's estimates as iPhone revenue came in stronger than expected.

Last month, the tech giant announced that insider John Ternus will become CEO in September, replacing Cook, who is set to take on the executive chairman role.

"The transition sets up (the Worldwide Developers Conference) at Apple Park in early June as the most consequential developer conference in years, with the tech world watching for the long-awaited personalized Siri, expanded Apple Intelligence capabilities, and additional details on the Google Gemini collaboration," Ives said Friday. "With iPhone 17 firing on all cylinders, China a clear tailwind, the June guide well ahead of the Street, and Ternus about to take the wheel heading into WWDC, (it's) all about the AI strategy."

Wedbush maintained its outperform rating on Apple's stock, with a $350 price target.

Price: $282.41, Change: $+11.06, Percent Change: +4.07%

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