Apple is set to report earnings after the bell on Thursday, with traders expecting significant volatility in the stock price. Implied volatility suggests a 3.5% swing following the earnings release, which is notably higher than the average 1.8% move seen after the last four quarterly reports [1]. Options activity has surged, with call volumes and premiums outpacing puts, indicating heightened interest in potential upside, though the sentiment is not uniformly bullish. Notably, some large trades involved selling calls at various strike prices, including one trader collecting nearly $1 million in premium by selling $290 and $300-strike calls expiring December 18, and another collecting over $3 million by selling $240 and $250-strike calls expiring May 15 [1]. Despite this, at least one trader paid above the market asking price for $330,000 of 320-strike calls expiring July 17, reflecting mixed expectations [1].
This earnings call is particularly significant as it is the first since Apple announced its planned C-suite changes, with longtime CEO Tim Cook set to leave in September and be replaced by John Ternus, senior vice president of hardware engineering [2]. Traders on Kalshi believe it is almost certain that Apple will address China and tariffs during the call, assigning 98% and 96% odds, respectively [2]. Other topics, such as Google's Gemini AI model, have a 27% chance of being mentioned, reflecting Apple's deal to implement Gemini into its Apple Intelligence features. However, Wall Street views Apple as lagging in AI development compared to peers [2].
Traders are less convinced that Apple will discuss new hardware innovations, assigning only a 24% chance to the mention of smart glasses and just a 9% chance to any discussion of foldable devices. This skepticism follows reports of delays in the development timeline for a foldable iPhone, though Bloomberg reports a planned fall 2026 launch remains on schedule [2].
Historically, Apple stock has fallen after five of its last six earnings reports and after seven of the last ten, which may influence bearish sentiment among some traders [1]. However, the current options flows are less one-directional than in previous quarters, indicating a more balanced market outlook ahead of the earnings announcement [1].
CONCLUSION
Apple's upcoming earnings report is generating significant anticipation, with traders expecting a larger-than-usual stock move and closely watching for commentary on China, tariffs, and AI strategy. The CEO transition adds further uncertainty, while options activity reflects a mix of bullish and bearish bets. Market participants are bracing for volatility as Apple navigates leadership changes and evolving technology trends.