AAPL has slipped another 1.4% on the week to $304.91, continuing its post-earnings drift lower — but the most interesting move this week is in options, where traders have quietly turned the most bullish they have been in months, even as the stock continues to lose ground.
The options market is sending an unusually optimistic signal for a stock that just fell 8.7% on July 30 earnings. The put/call ratio has dropped to 0.70, now running well below its 20-day average of 0.78 — a full 1.2 standard deviations light on protection — and approaching the lowest reading of the past year. That is a notable posture. Coming into earnings, the PCR was elevated and hedges were being actively added. All of that has since been removed, and call positioning has grown to fill the gap. Whether traders are positioning for a recovery or simply rotating out of expired put protection is the interpretive question, but directionally the options market is leaning bullish into a stock that has shed more than 3% in a month.
Short interest reinforces the lack of bear conviction. Shorts have been unwinding steadily — SI fell 12.4% over the past week and is now below 0.9% of the free float, continuing a trend that has run since late July when shares stood near 150 million. The borrow market imposes no friction: availability is effectively unlimited, and cost to borrow at 0.36% is trivial in absolute terms. Short sellers are not pressing the decline; they are walking away from it. The ORTEX short score has also eased, slipping from 30.4 in late July to 29.3 now — a modest but consistent move away from the more elevated readings that preceded the earnings print.
The Street is more fractured than the options market suggests. The most consequential move this week came from Jefferies, where Edison Lee — having downgraded to Underperform on August 10 with a $263.66 target — now anchors the bearish extreme, a full 14% below the current price. That downgrade was product-driven: the reported cancellation of the all-glass iPhone design removes a key hardware upgrade catalyst the Street had been pricing. Bulls counter with the services and AI story. JP Morgan held its Overweight after July earnings but trimmed its target from $345 to $340. Goldman Sachs kept its Buy but cut from $370 to $360. On the other side, TD Cowen raised to $400 and Wells Fargo lifted to $350 on the same reporting day — a split that neatly captures the debate. The mean target of $322 implies roughly 5.5% upside from here, but the $137 gap between the highest ($400) and lowest ($245, Barclays Underweight) call on the Street is wide even by Apple's standards. Valuation multiples have been compressing: the P/E has declined roughly 4% over the past month to 33x, and EV/EBITDA has followed. Bulls cite AI monetisation and services durability; bears argue the premium is hard to justify if iPhone unit growth stalls and carrier subsidies keep retreating.
The earnings history adds important context. The July 30 print produced an 8.7% single-day decline and an extended five-day loss of 7.6% — the stock's sharpest post-earnings fall in recent memory. Apple does not report again until late October 29, which means there is no near-term binary catalyst to force a resolution. That absence of a catalyst may itself explain the options posture: with more than ten weeks to the next print, shorter-dated hedges have expired and the path of least resistance for the options book is to reload calls rather than puts.
The next test worth tracking is whether the Street's bullish consensus — still clustered well above the current price — holds as the hardware-cycle debate sharpens, or whether further target cuts begin dragging the mean closer to where the stock is actually trading.
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