Apple Earnings on Deck: Trading the Tech Giant with Leveraged & Inverse ETF Tools

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Apple Inc.'s (AAPL) Q1 2025 earnings report, scheduled for January 30th after market close, will be closely scrutinized by investors. Key areas of focus include iPhone sales metrics, Services revenue growth, and overall margin expansion. Investors will also be watching for updates on the Vision Pro launch, App Store revenue trends, and the company's performance in the crucial Chinese market.

In addition to these key areas, investors will be looking for management's commentary on supply chain dynamics, the health of consumer spending, and potential AI integration across Apple's ecosystem.

As the world's largest company by market capitalization, AAPL often experiences heightened volatility around earnings releases. For traders looking to attempt to capitalize on this increased volatility, whether bullish or bearish, Direxion's Single Stock Daily Leveraged & Inverse ETFs are popular tools to potentially profit from anticipated price swings.

What to Expect from Apple's Next Earnings Report

Analysts expect Apple to deliver earnings of $2.36 per share, representing an 8.3% increase from last year's $2.18. The company enters this report having topped Wall Street's expectations in each of the past four quarters. Services revenue growth remains in focus, with the segment's recent performance falling short of expectations despite hitting record levels.

The previous quarter saw Apple exceed overall estimates with $1.64 earnings per share, though product mix showed some weakness. While iPhone sales beat projections, Mac, iPad, and other product revenues missed analysts' targets. However, operating margins expanded 105 basis points to 46.2%, highlighting the company's pricing power and efficiency.

Apple's Earnings Track Record

The tech giant has consistently exceeded analyst expectations, with earnings surprises ranging from 1.32% to 10.07% over the past four quarters. October 2024's mixed results triggered a 1.3% decline despite beating EPS estimates, as services revenue missed targets. The company's operating cash flow reached $118.3 billion in fiscal 2024, enabling substantial shareholder returns through buybacks.

Trading Apple's Price Swings with Specialized ETFs

Apple's large market cap and broad market influence make it a popular trading vehicle. For those looking to magnify returns or bet against the tech giant, Direxion's Single Stock Daily Leveraged & Inverse ETFs provide specialized tools designed specifically for short-term tactical trading around events like earnings.

These purpose-built trading vehicles use sophisticated derivatives strategies to deliver precise daily exposure, making them particularly effective during periods of heightened market activity.

Magnified Upside Potential: AAPU

Direxion's Daily AAPL Bull 2X Shares (AAPU) attempts to double Apple's daily movements. This innovative tool amplifies the stock's daily returns through careful portfolio management and derivative strategies. Since launch, AAPU has become increasingly popular during earnings season.

• Designed to deliver 200% of AAPL's daily movement
  • A 1% rise in Apple stock targets a 2% gain for AAPU (before fees)
  • A 1% drop in Apple stock targets a 2% decline for AAPU (before fees)
• Engineered for traders seeking amplified exposure to earnings results
• Peak trading activity typically occurs around quarterly announcements
• Substantial liquidity with over 1.6 million shares traded daily
• Best suited for active traders monitoring positions closely

Inverse Exposure Strategy: AAPD

For traders seeking downside exposure to Apple, the Direxion Daily AAPL Bear 1X Shares (AAPD) provides a straightforward approach for inverse exposure without the complexities of short selling. This makes AAPD particularly valuable for retirement account traders who can't short stocks directly but want to take a bearish position on AAPL.

• Mirrors the opposite of AAPL's daily performance
  • When Apple drops 1%, AAPD aims for a 1% gain (before fees)
  • When Apple gains 1%, AAPD aims for a 1% decline (before fees)
• Essential tool for retirement accounts looking to profit from potential declines
• Tactical hedge against Apple-specific market risks
• Maintains consistent liquidity with 1.1 million shares traded daily
• Ideal for capitalizing on potential earnings disappointments

Traders note: Both (AAPU) and (AAPD) require active management and regular monitoring due to their daily reset feature. These sophisticated tools are designed specifically for short-term tactical trading rather than long-term investment strategies and are not designed for “buy-and-hold” style investing.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stack rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods /anger than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will Jose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will Jose money even if the underlying stock's performance increases. and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in AAPL.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with AAPL and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with AAPL and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to AAPL is impacted by AAPL’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to AAPL at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to AAPL increases on days when AAPL is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with AAPL and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to AAPL is impacted by AAPL’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to AAPL at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to AAPL increases on days when AAPL is volatile near the close of the trading day.

Technology Sector Risk — The market prices of technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices.

Apple Inc. Investing Risk — In addition to the risks associated with companies in the technology sector, Apple Inc. faces risks related to market conditions, market disruptions, competition, managing the frequent introductions and transitions of products and services; as well as the outsourced manufacturing and logistical services provided by partners. Issuer-specific attributes may cause an investment held by a Fund to be more volatile than the market generally. The value of an individual security or particular type of security may be more volatile than the market as a whole and may perform differently from the value of the market as a whole.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily AAPL Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

Distributor: ALPS Distributors, Inc.

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