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More Reading from MarketBeat.com Why Apple's Sell-Off May Be Overdone Right Before EarningsSubmitted by Sam Quirke. Originally Published: 1/22/2026. 
At a Glance- 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 giantApple Inc. (NASDAQ: AAPL) have been under pressure as investors continue to sell the stock. With shares currently trading around $245, they are down roughly 15% from the all-time high set just last month. The decline has been largely one-directional and somewhat surprising given Apple's 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 over the past week. What makes the current setup notable, however, is how stretched some of the stock's technical indicators have become. This month Apple's relative strength index (RSI) sank into extremely oversold territory — currently around 18 — its lowest reading since September 2008. That is an extreme level by any measure, and it 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 EarningsA widely followed Wall Street analyst is highlighting AES Corp (AES) as a stock to watch right now, based on signals from his proprietary Power Gauge system. The model tracks factors like momentum, financial strength, and institutional activity across thousands of U.S. stocks.
He breaks down the full reasoning in a short briefing, including why AES is showing unusual strength at this stage of the market. See the full analysis here An RSI reading this low for a stock like Apple would draw attention even without other context. With the company headed into a closely watched earnings report next week, the setup becomes even more interesting. Apple has a long track record of beating analyst expectations each quarter, and that history frames the current opportunity. After such aggressive selling, is there an argument that the worst-case scenario is already priced in? Apple’s Fundamentals Continue to Support the Bull CaseFrom a business perspective, Apple's recent share-price action looks increasingly disconnected from its fundamentals. Its consistent ability to exceed expectations is rare among large-cap peers. Gross margins remain healthy, and the ecosystem-driven model continues to generate reliable cash flow. Apple's capital-return strategy also provides a meaningful cushion for investors considering a position. A robust share buyback program and steady dividend growth mean management is a persistent buyer during periods of weakness. That doesn't prevent drawdowns like this, but it tends to limit how long pessimism can dominate. There are, of course, headwinds behind the sell-off. iPhone shipment volumes have come under pressure, and Apple's valuation sits toward the upper end of its recent range. Those factors justify some caution, but they don't fully explain the speed and scale of the recent drop. Analyst Conviction Builds Going Into Apple’s Earnings ReportThe buy-the-dip case gains additional support from strong analyst conviction. This week, Evercore added Apple to its tactical outperform list ahead of next week's earnings, signaling confidence that results will beat expectations. Analysts point to a favorable mix of iPhone sales: higher-end models have reportedly accounted for 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 gave Apple a fresh price target of $330, implying upside of about 35%, while Wedbush recently set a $350 target. Those updates reinforce the view that the market may have overreacted. Even a modest beat on revenue or earnings could shift sentiment, particularly given how washed-out momentum already looks. Apple’s Risk/Reward Skews Favorably at Current LevelsNone of this makes Apple risk-free. Earnings next week will matter more than usual, and a materially disappointing report would likely trigger further weakness, especially if the geopolitical picture deteriorates. Still, the setup looks increasingly asymmetric. This is the most oversold Apple has been in nearly two decades. For a company with its balance sheet, margins, and track record of returning capital to shareholders, those conditions make buying at these levels hard to ignore.
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