Despite Apple’s recent successes, analysts are bracing for some sobering news next week when the company reports its second-quarter earnings. “Between major legal challenges across several continents, increasing competition from Google Inc's Android -- now the world's most-used mobile software -- and confusion over what its next groundbreaking product will look like, more cautious investors are re-evaluating their positions and cashing in some holdings,” Reuters reports.
Fueling the fear is that fact Apple's shares surged nearly 60% to a high of $644, this year. To many Web watchers, that suggests a bubble, which will need to be popped at some point. Put another way, “the slightest sign of trouble in the earnings report may prompt further profit-taking,” Reuters writes.
"Any disappointment in Apple could lead to a significant selloff in the short term," Channing Smith, co-manager at Capital Advisors Growth Fund, tells the news service. "Are we long term believers in Apple? Absolutely, but as we move forward...you get up here to over $600 and you say, ‘Hmm, this is getting pretty frothy, expectations may be getting out of line.'"