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Why Apple's Sell-Off May Be Overdone Right Before Earnings
Author: Sam Quirke. First Published: 1/22/2026.
What You Need to Know
- Apple’s stock has retraced sharply and entered deeply oversold territory technically, creating a potential buying setup ahead of earnings.
- Despite recent share weakness, Apple’s fundamentals—strong margins, recurring services revenue, and capital return programs—remain intact.
- Analyst optimism and upbeat price targets underscore expectations that a positive earnings report could trigger a meaningful rebound.
Shares of tech giant Apple Inc. (NASDAQ: AAPL) have been under pressure as investors sell the stock. With shares currently trading around $245, they sit roughly 15% below last month's all-time high. The drop has been largely one-directional and somewhat surprising given Apple's long-standing reputation as one of the market's most dependable large-cap performers.
The broader backdrop hasn't helped: rising geopolitical tensions have driven a sharp risk-off sentiment across equities this week.
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Click here to watch Jeff's urgent briefingWhat stands out is how stretched some of the stock's technical indicators have become. Apple's relative strength index (RSI) has plunged into extreme oversold territory — around 18, its lowest reading since September 2008. That is an extreme level by any measure and raises the question of whether selling pressure has gone too far, too fast, especially with earnings due next week.
Context Matters as Apple Heads Into Earnings
An RSI this low for a stock like Apple would attract attention on its own. With a closely watched earnings report looming, the setup becomes even more notable.
Apple has a long track record of beating analyst expectations each quarter, and that history frames the current opportunity. Having been sold off so aggressively, is there an argument that the worst-case scenario is already priced in?
Apple’s Fundamentals Continue to Support the Bull Case
From a business standpoint, Apple's recent share-price action looks increasingly disconnected from its fundamentals. Its record of beating expectations is rare among peers. Gross margins remain strong, and its ecosystem-driven model continues to generate dependable cash flow.
Apple's capital-return strategy also provides a meaningful cushion for investors considering an entry. A robust share buyback program and steady dividend growth mean management is a persistent buyer of the stock during periods of weakness. That doesn't prevent drawdowns, but it tends to limit how long pessimism can dominate.
There are, of course, headwinds behind the sell-off. iPhone shipment volumes have been under pressure, and Apple's valuation sits toward the upper end of its recent range. Those factors explain some caution, but they don't fully justify the speed or scale of the recent drop.
Analyst Conviction Builds Going Into Apple’s Earnings Report
The buy-the-dip case gains further support from Apple's steady analyst backing. This week, Evercore added Apple to its tactical outperform list ahead of next week's earnings, signaling confidence that results will exceed expectations.
A key theme in recent commentary has been the mix of iPhone sales. Higher-end models have reportedly captured a larger share of demand, supporting average selling prices and margins. Services revenue is also expected to remain a steady growth engine, helping offset any softness in hardware volumes.
Evercore set a fresh price target of $330, implying upside of roughly 35%, but that isn't the highest. Wedbush issued a bullish update last week with a $350 target, reinforcing the view that the market may have overreacted. Even a modest beat on revenue or earnings could be enough to shift sentiment, particularly given how washed-out momentum already looks.
Apple’s Risk/Reward Skews Favorably at Current Levels
None of this makes Apple risk-free. Next week's earnings will matter more than usual, and a genuine disappointment could trigger further weakness, especially if geopolitical tensions intensify.
Still, the setup looks increasingly asymmetric. This is the most oversold the stock has been in nearly two decades. For a company with Apple's balance sheet, margins and capital-return track record, the risk/reward looks compelling for long-term investors.
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