Apple falls as Wall Street digests June quarter hit, analysts note demand is 'Teflon-like'
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Apple (NASDAQ:AAPL) shares fell in premarket trading on Friday after the tech giant said events like the China COVID-lockdowns and chip constraints would impact next quarter's revenue by a wide margin, though analysts were quick to note demand for its products and services is still strong.
Wedbush Securities analyst Dan Ives, who rates Apple (AAPL) outperform with a $200-per-share cash target, noted that the March quarterly results were "very impressive" and even though the June quarter could be impacted between $4 billion and $8 billion, demand is still healthy.
"The China issues and supply chain should be peak worry in the June quarter and then subside into the key September/December quarters on the heels of a new iPhone 14 launch," Ives wrote in a note to clients.
Apple (AAPL) shares fell 2.5% to $159.51 in premarket trading on Friday.
In addition, Ives noted that without the $4 billion to $8 billion headwind for next quarter, earnings estimates would have been raised, which "speaks to the Teflon-like demand story well intact in Cupertino."
Morgan Stanley analyst Katy Huberty lowered her price target to $195 from $210, but said the health of Apple (AAPL) is still strong, even accounting for the headwinds. 
"While we will continue to closely track the pace of China's reopening, as well as Apple product lead times, for signs of supply challenges easing, we believe the underlying health of Apple's product and services ecosystem remains remarkably stable, which is a clear differentiator in today's more challenging macro environment," Huberty explained in a note.
Apple (AAPL) has worked to move some of its production to other countries outside of China and on Friday, Digitimes reported that iPhone production in India could grow up to five times in 2023 from 2022 levels.
During the fiscal second-quarter, Apple (AAPL) generated $97.28 billion in revenue, including $50.57 billion attributed to the iPhone. Mac sales came in at $10.4 billion, while revenue attributed to the iPad and its Services division came in at $7.6 billion and $19.8 billion, respectively. Wearable revenue, which includes the Apple Watch and AirPods, came in at $8.8 billion, up from $7.8 billion in the year-ago period.
Chief Financial Officer Luca Maestri said on the conference call that Apple (AAPL) had 825 million subscribers, up from 785 million in the previous quarter and 660 million in the prior-year period.
Apple (AAPL) also said it would raise its buyback program by $90 billion and boost its quarterly dividend by 5% to $0.23 per share.
Piper Sandler analyst Harsh Kumar, who rates Apple (AAPL) overweight with a $195 price target, noted that the quarterly results and guidance "demonstrate the strength of the Apple ecosystem and the strong customer loyalty to both products and services."
On Wednesday, it was reported that Apple (AAPL) has been granted two more mixed-reality headset patents to add to its portfolio.