Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.
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 stock 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 longer 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 lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose 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.
Apple, Inc. (Ticker: AAPL) is sitting near record highs, powered by strong iPhone 17 demand, resilient revenue, and a wave of analyst price-target hikes. On the surface, the tape looks pretty calm.
Underneath, though, the debate is getting louder. Bulls see a company extending its iPhone lineup, defending its profit margins, and buying time as its artificial intelligence (AI) roadmap comes into focus. Meanwhile, bears counter that Apple is priced for near-perfect execution just as regulatory pressure, AI delays, and China exposure are creating doubt.
That tension matters now. With earnings season approaching and multiple 2026 catalysts already influencing positioning, traders are wondering if Apple’s momentum will carry through, or if the stock is vulnerable to a valuation reset if anything slips.
Below is a daily chart of AAPL as of December 16, 2025.
Source: StockCharts.com
Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.
The performance data quoted represents past performance. Past performance does not guarantee future results.
Why Bulls are Upbeat on Apple Now
Summary:
iPhone demand is accelerating, not fading
Analysts are raising price targets
Product expansion could extend the cycle
Recent reports point to strong iPhone 17 sales and plans to expand Apple’s iPhone lineup over the next two years, including a foldable model. Bulls argue this turns what could have been a one-year upgrade cycle into a multi-year hardware runway, supporting revenue even as other consumer tech names face demand questions.
Wall Street is leaning into that view. Multiple firms have raised price targets recently, citing iPhone momentum and optimism around Apple’s AI rollout. The upgrades don’t claim Apple is cheap; they argue that earnings are more durable than skeptics assume, especially with services revenue cushioning volatility. Services—Apple’s high-margin, recurring revenue from the App Store, subscriptions, and payments—help smooth earnings when hardware demand swings.
From a trader’s lens, the bull case isn’t about long-term reinvention. It’s about near-term execution holding up well enough to keep momentum intact into earnings and early-2026 product narratives.
Traders leaning bullish might consider Direxion’s Daily AAPL Bull 2X Shares (Ticker: AAPU), which seeks daily investment results, before fees and expenses, of 200% of the performance of Apple, Inc. common stock (Ticker: AAPL).
Why Bears Think Apple May be Ripe for a Fall
Summary:
Valuation leaves little room for error
AI progress is lagging competitors
Regulatory and geopolitical risks
The most pointed bear argument is valuation. Apple is trading near highs while a growing chorus warns that any slowdown could trigger a sharp re-rating. History shows that Apple can see steep drawdowns when expectations reset, even without a broader market decline.
AI is another pressure point. Apple’s major Siri overhaul has been pushed into 2026, while rivals continue to launch new features. Bulls frame Apple Intelligence as a deliberate, privacy-first strategy; bears see a widening execution gap at a time when AI optimism is baked into mega-cap tech valuations.
Then there’s regulation. In Europe, developer groups are urging tougher enforcement of the Digital Markets Act, while U.S. App Store litigation is scheduled for February 2026. Recent rulings against Apple’s external payment fees keep uncertainty around services revenue firmly in play.
Add in Apple’s heavy reliance on China for iPhone manufacturing and ongoing geopolitical risk, and bears argue the stock doesn’t need a disaster—just a disappointment.
Traders anticipating downside or volatility might look to Direxion’s Daily AAPL Bear 1X Shares (Ticker: AAPD), which seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of Apple, Inc. (Ticker: AAPL).
What to Watch for in Coming Weeks
Apple’s setup is less about a single headline and more about stacked catalysts. The company is expected to report quarterly earnings on or around January 29, 2026. Near-term earnings will test whether iPhone and Services strength can justify current pricing. Into 2026, the focus shifts to AI delivery timelines, App Store legal outcomes, and supply-chain resilience. Bulls are betting Apple keeps clearing the bar. Bears are betting the bar is simply too high.
For traders, Apple has become a precision trade: momentum on one side, valuation and execution risk on the other. Which force wins may decide whether AAPL grinds higher—or reminds the market how quickly even its strongest names can reset.
* Definitions and Index Descriptions
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.
Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production costs.
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.
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