But Wall Street is mostly defending the company, pointing to potential bright spots in Apple's services business, as well as expanding profit margins during the historically busy holiday quarter.
Apple will release its earnings results shortly after 4 p.m. ET, and its conference call with analysts will start around 5 p.m.
Apple's stock was down 4% year-to-date through Wednesday's close, outpacing the S&P 500's 3% gain.
Wedbush says iPhone turnaround is possible despite China weakness
Wedbush analyst Dan Ives said in a recent note that the concern over Apple's reportedly weak China iPhone sales is "way overdone."
"Our recent Apple iPhone China checks are mixed to softer, but overall unit declines in the region we see as 'manageable,'" Ives said, adding that he expects the company to meet Wall Street's fiscal first-quarter revenue and profit expectations.
"We also believe Apple should have a strong performance on the services front which is the linchpin to the $4.5 trillion sum of the parts valuation we see over the next 12 to 18 months," Ives added.
Ives said the continued rollout of Apple's AI features is underappreciated by investors. He expects about 20% of the world's population will access AI features via an Apple device in the coming years.
"What the bears continue to miss on Apple is its golden installed base of 1.5 billion iPhones and 2.3 billion iOS devices is unmatched and will create a new AI driven growth story that the Street is not factoring into the stock," Ives said.
Wedbush rates Apple at "Outperform" with a $325 price target.
Wall Street analysts are expecting weak iPhone sales in ChinaApple fans line up on Friday outside a store in Hangzhou, China.
NurPhoto/Getty Images
Apple's earnings results will likely showcase a recurring theme for its investors: weak iPhone sales in China to be offset by double-digit revenue growth in the company's services business.
That's according to Anurag Rana, senior industry analyst for the technology sector at Bloomberg Intelligence.
Weak consumer spending trends in China, combined with increased competition from Huawei, suggest to Rana that the weakness in Apple's China sales will continue into the future.
But iPhone sales in the Americas and Europe should be a bright spot, according to the recent note from Rana.
"A double-digit sales boost in Services will likely be another bright spot, driven by increased App Store use and other ancillary services tied to the recently released iPhone 16 models," Rana said.
Finally, Apple's stock buyback program could be another bright spot for investors, with Rana estimating share repurchase figures of $25 billion to $27 billion in the quarter.
Apple earnings expectations: Consensus first-quarter revenue estimate is $124.1 billion.
1st quarter
Revenue estimate: $124.1 billion
Products revenue estimate: $98.02 billion
IPhone revenue estimate: $71.04 billion
Mac revenue estimate: $7.94 billion
IPad revenue estimate: $7.35 billion
Wearables, home and accessories estimate: $11.95 billion
Service revenue estimate: $26.1 billion
Greater China rev. estimate: $17.97 billion
EPS estimate: $2.35
Adjusted EPS estimate: $2.35
Operating cash flow estimate: $39.03 billion
Total operating expenses estimate: $15.34 billion
Gross margin estimate: $57.98 billion
Cash and cash equivalents estimate: $36.45 billion
Cost of sales estimate: $65.98 billion
Total current assets estimate: $165.17 billion
Total current liabilities estimate: $167.07 billion
