$Apple (AAPL.US)$ is poised to surpass earnings expectations in the third quarter, driven by strong performance across its iPad, Mac and Services segments. Goldman Sachs analyst Michael Ng predicted an EPS of $1.36 on $85.1 billion in revenue, as Apple reports on Aug. 1.

Apple iPad, Mac To See Double-Digit Growth, Says Analyst

Ng's optimism was fueled by anticipated strong performance in Apple's iPad and Mac segments, which are expected to see double-digit growth, alongside a robust 15% increase in Services revenue.

Ng attributed the projected EPS beat to Apple's innovative product lineup and strategic pricing. Ng stated, "We expect AAPL to deliver an EPS beat in F3Q24E with $85.1 bn of revenue (+4% yoy) and EPS of $1.36."

He forecasts iPhone revenue at $37.8 billion, despite a 5% year-over-year decline due to price discounting efforts to maintain clean channel inventories.

Apple AI: Catalyst For Future Growth

The analyst highlighted Apple's AI advancements as a catalyst for future growth, particularly in driving iPhone upgrades.

"Apple AI can drive an uplift in iPhone shipments as customers look to upgrade to hardware that supports new generative AI features," Ng said. This technological edge, coupled with larger screens for the Pro and Pro Max models in iPhone 16 and thinner devices in iPhone 17, is expected to boost iPhone shipments to 230 million to 256 million units between 2024 and 2026.

Ng also pointed to Apple's success in creating a seamless ecosystem that drives multiple device ownership per user. He stated, "Increased number of Apple devices per iPhone user with Mac and iPad also being AI beneficiaries." This strategy is anticipated to sustain revenue growth, particularly with the recent launches of MacBook Air models and new iPads.

Apple's Services Segment To See Strong App Store Spending

Despite the challenges in the broader PC and tablet markets, Ng remained confident in Apple's ability to navigate these headwinds. He saw potential in Apple's Services segment, driven by price increases and continued strong App Store spending, as a key driver of future profitability.

"The majority of gross profit growth over the next five years should be driven by Services," Ng said, highlighting the durability and visibility of Apple's revenue streams.

Ng's price target for Apple stands at $265, representing a 15.8% upside from its current price of $228.88. He maintained a bullish rating on the stock, emphasizing the strength of the Apple ecosystem and its potential for sustained growth.