Apple has a lot to live with with its earnings report coming on the heels of the rally, which has added nearly $ 300 billion in market value this year.
Shares rose 44% from the 21-month low that started in January after worse-than-expected iPhone sales, which led the company to lower its first quarter sales forecast.
The recovery was partially driven by Apple's new digital services. However, Wall Street is increasingly skeptical of the profits. Only 22 out of 46 analysts allocate purchase ratings, while stocks have the lowest bulling age in at least two years, according to Bloomberg figures.
"We strive to look at the weak data points on demand for the iPhone and recommend a cautious attitude," said Wells Fargo analyst Aaron Rakers in a recent research report.
Here's what to look for in the Apple fiscal report for the second quarter, which is due after trading on Tuesday.
The poor sale of iPhone in China was a great reason why Apple lowered its forecast in January. Investors want to know if trends in this critical region have improved.
Apple's iPhone revenue is expected to reach $ 30.5 billion in fiscal second quarter, according to six estimates compiled by Bloomberg. That would be 19% less than in the same period last year.
"Big unknown remains China," said UBS analyst Timothy Arcuri. Given the "low expectations", the revenue report for Apple and the forecast "should be fine," he wrote in a research note.
With iPhone sales, investors are increasingly growing in revenue for services that continue to grow. Wall Street expects revenue in the fiscal second quarter to be $ 11.2 billion, up 22% from the same period last year.
In March, Apple introduced a new digital service including streaming video and subscription for mobile games. The bids "brought a new wave of monetization opportunities for Apple, and in the years to come they give users more reasons to live on the Apple planet," said Monness analyst Crespi Hardt & Co.. Brian White.
In April, Apple quit all Qualcomm litigation and agreed to re-use chip maker modems, probably including major new 5G releases. It ended a two-year battle for technology that is the foundation of all smartphones. The deal also renewed speculation about when Apple will introduce the iPhone 5G.
Investors will look for further settlement details and advice on Apple's 5G maps.
Traditionally, Apple has updated its return on capital plans with a fiscal second quarter earnings report. This time, Apple could add up to $ 100 billion to share repurchase authorization and raise its dividend up to 16% according to Gene Munster's Loup Ventures.
Katy Huberty, Morgan Stanley, expects a $ 50 billion increase and a 10% increase in dividends.
© 2019 Bloomberg L.P