Apple App Store Sales Jump In May, Boosting Outlook For Services Growth

JP Morgan analyst Samik Chatterjee had an Overweight rating on Apple Inc AAPL on Tuesday.

Apple's App Store revenue for May, tracked by Sensor Tower, increased by 4.9% month-over-month (which compares to an average sequential uptick of 2.3% seen historically going from April to May) and helped support an acceleration of year-over-year revenue trends to up 13.0% Y/Y in May (versus up 11.8% Y/Y in April), Chatterjee stated.

While the management did not provide official guidance for Services revenue growth for the calendar second quarter or fiscal third quarter, the analyst noted the latest monthly revenue trends for the App Store to be supportive of Services growth tracking in line with his forecast for low-double-digit year-over-year growth, contrary to investor concerns from the lack of an explicit guide.

Don’t Miss:

Start investing with eToro's CopyTrader — mirror top-performing traders with no management fees, and receive a $10 bonus when you deposit $100 today.
Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

Chatterjee remarked that in May, App Store downloads increased by 2.0% month over month (versus a decline of 4.6 % M/M in April), compared to an average sequential change of 0.1% decline seen historically from April to May.

The analyst said that on a year-over-year basis, the App Store downloads increased by 3.1% in May (versus +5.8% in April).

On the flip side, some experts cite research pointing toward growth issues for Apple's iPhone. Counterpoint Research has cut growth expectations for global smartphone shipments in 2025 to 1.9% on Wednesday, down from 4.2% previously, citing Trump administration tariff-related uncertainties.

The firm also revised shipment growth from China down to near flat and expects Apple and Samsung Electronics shipments to slow as the companies pass the cost burden on consumers.

Other research from IDC expects the U.S. smartphone shipment to grow by 1.9% in 2025, down from 3.3% in 2017, due to increased uncertainty and tariff-related price increases.

Meanwhile, Deepwater Research's Gene Munster estimated that Apple has about two years to perfect its AI strategy, but it will require increased investments.

Read Next: