Apple stock has best day since 2022 after earnings beat, $110 billion stock buyback

• Apple shares popped on Friday, their best day since November 2022, after the company reported better-than-expected second-quarter earnings and the largest-ever stock buyback program.
• The iPhone maker announced on Thursday it would repurchase $110 billion of its shares, the biggest buyback in U.S. history.
• Overall sales decreased 4% and iPhone sales dropped 10% year over year during the quarter.

Apple’s CEO Tim Cook attends the China Development Forum in Beijing on March 24, 2024.

Apple shares popped 6% Friday after the company reported better-than-expected second-quarter earnings and the largest-ever stock buyback program. It was the best day for the stock since Nov. 30, 2022.

The iPhone maker announced Thursday it would repurchase $110 billion of its shares, the biggest buyback in U.S. history, surpassing Apple’s prior repurchases. The company posted earnings of $1.53 per share on revenue of $90.75 billion, exceeding analysts’ estimates of earnings of $1.50 per share on revenue of $90.01 billion, according to LSEG.

But overall sales decreased 4% and iPhone sales dropped 10% year over year during the quarter, indicating flagging demand for the smartphone’s latest generation. Apple CEO Tim Cook told CNBC that quarterly sales suffered from a difficult comparison to the year-earlier period.

Analysts at Bank of America reiterated their buy rating of Apple stock, calling it a top pick, and raised their price target to $230 from $225 in a Friday investor note, writing that they expect the company to roll out generative artificial intelligence features for the iPhone this year.

“Apple is growing iPhones in Mainland China, estimate revisions are turning positive and GenAI features will drive a strong upgrade cycle,” they wrote.

JPMorgan analysts, maintaining an overweight rating, lifted their price target for Apple to $225 from $210 on Thursday, pointing to “resilient” year-over-year iPhone revenues and “expectations of an upgrade cycle-led tailwind in iPads” ahead of Apple’s product launch event next week.

“All in all, while modest revenue growth year-over-year might not be the ideal outcome,” they wrote, “it now provides visibility into higher revenue opportunities in the coming years with tailwinds from product cycles across hardware devices as well as an AI-led smartphone cycle further boosting growth.”

Morgan Stanley analysts retained their overweight rating of Apple and hiked their price target to $216 from $210 on Friday, citing the company’s quarterly performance, year-over-year growth in iPhone shipments to China in March, stock buyback and hints at AI updates to come.

“It’s hard not to get more bullish here,” they wrote.

— CNBC’s Michael Bloom contributed to this report.