Apple's App Store Booms, But The Stock Lags: Is It Time To Buy?

Shares of Apple Inc. AAPL remain one of 2025’s biggest tech underperformers, lagging the Nasdaq 100 index by a wide 25% year-to-date, even as the iPhone-maker recently posted robust results that may suggest the selloff is disconnected from fundamentals.

As of August 5, Apple stock is down 18% year-to-date, failing to rebound despite a stronger-than-expected earnings report on July 31 and signs of accelerating growth in its Services segment.

Over the last 20 weeks, Apple has underperformed the tech-heavy Nasdaq 100 by 20%, one of its widest gaps in recent decades.

Strong Third-Quarter Results Go Unrewarded

Apple’s fiscal third-quarter results, covering the period ended June 30, beat expectations across the board. The company reported earnings per share of $1.57, exceeding the consensus estimate of $1.438, marking a 12% increase from the same quarter last year.

Revenue came in at $94.04 billion, a 9% year-over-year gain and well above Wall Street’s forecast of $89.56 billion.

Despite this, shares barely reacted, reflecting what many see as investor fatigue with Big Tech or concerns over slowing AI innovation.

However, recent App Store data, which falls outside of the earnings window, may offer fresh support for bulls.

App Store Spending Hits Highest Growth Rate Since 2024

According to Goldman Sachs analyst Michael Ng, App Store revenue surged 13% year-over-year in July 2025, reaching $6.79 billion, up from $6.02 billion in July 2024. This marked an acceleration from 12% growth in June and the fastest pace since November 2024.

“This is in line with our estimate for AAPL fiscal fourth quarter Services revenue growth of +13%,” Ng said, adding that the App Store remains Apple’s most significant contributor to Services, comprising an estimated 20% to 25% of that segment.

Spending in the U.S. increased by 13%, while China’s spending rose 6%, and the U.K.’s spending advanced 24%. Globally, App Store and Google Play Store combined saw spending rise 13% to $9.98 billion.

Games, which comprise 46% of App Store revenue, grew 3% year-over-year in July, bouncing back from flat growth in June. Entertainment apps rose 19%, while Photo and Video apps jumped 27%, though both decelerated slightly from the previous month.

Goldman Sachs holds a 12-month price target of $266, implying a 30% upside from current levels.

If App Store revenue is booming, seasonality adds another tailwind for Apple. The stock’s technical history suggests that August is historically Apple’s second-best-performing month, after July, with an average gain of 5.1% and a 63% winning rate over the last 30 years.

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