Apple Inc: strong App Store revenue growth to underpin services, Evercore says

Investing.com– Apple Inc’s (NASDAQ:AAPL) App Store clocked strong revenue growth through November, with Evercore noting that Asia remained a key driver and that sustained strength in the App Store was likely to drive up overall services revenue. 

App Store revenue grew 16% year-on-year in November, accelerating from the 15% growth seen in the prior month.

China and Japan were the biggest revenue drivers, while European revenues remained strong despite the implementation of the Digital Markets Act that allowed side loading of apps on Apple devices. 

Evercore said if the App Store could maintain double-digit growth, it could translate into stronger services revenue and could also help Apple potentially beat its guidance. The Cupertino-based tech giant expects about 13% services growth in the December quarter. 

The brokerage maintained its Outperform rating on Apple with a target price of $250. 

Apple’s services revenue has come into increased focus in recent quarters, given that it has helped largely offset softer revenue from device sales. 

The company is grappling with slower sales of its flagship iPhone 16 line, amid increased competition and regulatory scrutiny in major market China. 

Apple’s introduction of artificial intelligence features also did little to shore up sales. Recent data from IDC showed Apple is on track to log only a 0.4% increase in device shipments through 2024.