- Apple's App Store spending grew 13% year-over-year in July 2025, the fastest pace since November 2024.
- Goldman Sachs maintains its Buy rating and $266 price target, citing strong Services revenue growth potential.
- U.S. spending growth of 13% eases concerns about third-party payment competition.
App Store Momentum Builds
Apple's App Store saw spending accelerate to 13% year-over-year growth in July, up from 12% in June, according to Goldman Sachs analyst Michael Ng. This marks the strongest growth rate in eight months, reinforcing confidence in Apple's ability to deliver 13% Services revenue growth for fiscal Q4.
The U.S. market, a key battleground for regulatory scrutiny around payment systems, matched the global growth rate at 13%. "This suggests Apple is successfully navigating the shift toward alternative payment options," Ng noted in the report. The App Store remains a critical profit driver, contributing an estimated 20-25% of Apple's Services revenue.
Services in Focus
With hardware sales growth slowing, investors are increasingly focused on Apple's ability to monetize its 1.5 billion active device installed base through services. The July acceleration comes as Apple prepares to report Q4 earnings in late October. Analysts will be watching for signs that Services can maintain double-digit growth amid economic uncertainty and regulatory pressures.
Goldman's bullish stance reflects confidence in Apple's pricing power and ecosystem stickiness. The firm's $266 price target implies nearly 20% upside from current levels. While attempts to reach Apple for additional comment were unsuccessful, the company has previously emphasized its "relentless focus on delivering the best customer experience" across all services.
Correction: An earlier version misstated the month when 13% growth was last achieved. It was November 2024, not December.