Can Strong Content Portfolio Drive Apple's Streaming Prospects?

Apple's AAPL streaming business, Apple TV+, is benefiting from a strong content portfolio. The service has benefited from the success of Murderbot, Severance season 2, Mythic Quest season 4, among other shows. Apple has a strong lineup of content, including a new season of Slow Horses and The Morning Show, respectively, along with new shows, including Pluribus. Movie slate includes Highest 2 Lowest, The Lost Bus and F1 The Movie, per report from 9TO5Mac.

The success of titles like Severance has been a phenomenon for Apple TV+’s prospects. Severance scored 27 nominations at this year’s Emmy Awards, while The Studio made history as the most-nominated freshman comedy series with 23 nominations in total. Apple TV+ achieved a record-breaking 81 Emmy nominations this year, spanning 14 original titles. 

Apple’s original film F1: The Movie grossed more than $500 million worldwide and is expected to generate additional revenues through streaming and video-on-demand releases. 

Revenues from Apple TV+ are reported under Apple’s Services business, which accounted for 29.2% of third-quarter fiscal 2025 sales. Services revenues grew 13.3% year over year to $27.42 billion, with both paid accounts and paid subscriptions growing double digits year over year. Apple TV+ viewership soared double-digit year over year in the fiscal third quarter.

The Zacks Consensus Estimate for Services sales is pegged at $28.04 billion, indicating a 12.3% growth from the figure reported in the year-ago quarter.

Apple Faces Tough Competition in Streaming Market

AAPL is facing stiff competition from the likes of Amazon AMZN and Netflix NFLX in the streaming space. According to JustWatch’s data, Apple TV+ market share in the United States went from 7% in the fourth quarter of 2024 to 8% in the first quarter of 2025. However, it was minuscule compared with Amazon and Netflix. Amazon Prime Video led with 21% market share, trailed by Netflix at 20%.

Netflix is benefiting from its growing subscriber base, thanks to a robust localized and foreign-language content portfolio and healthy engagement levels with about two hours of viewing per member per day, indicating strong member retention.

Amazon’s advertising business hit a milestone in the second quarter of 2025, capturing 9.36% of the company’s total revenues. Revenues rose 23% year over year to $15.69 billion. The global rollout of Prime Video ads adds a high-value, premium channel that could further Amazon’s ad revenues. Live sports like the NFL, NASCAR, and NBA deepen engagement, driving further growth.

AAPL’s Share Price Performance, Valuation & Estimates

Apple shares have dropped 9.8% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 12.6%.

Apple Stock’s Performance

The AAPL stock is trading at a premium, with a forward 12-month Price/Earnings of 29.24X compared with the broader sector’s 27.65X. AAPL has a Value Score of F.

AAPL Valuation

The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $7.35 per share, up 3.4% over the past 30 days, suggesting 8.9% year-over-year growth.

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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