Apple App Store April Growth Slows to About 5%, Yet Goldman Sachs Still Maintains Buy Rating

Overview

This report focuses on the trend of Apple Inc.’s App Store spending in April 2026. According to Sensor Tower data, Goldman Sachs points out that the global net revenue growth rate of the Apple App Store decelerated from 6.2% in March 2026 to 4.9% in April, below the average April YoY growth rate of 8.8% observed between 2022 and 2025. Although the slowdown in App Store growth is seen as short-term pressure on the stock price, Goldman Sachs maintains its Buy rating for Apple, citing the company’s ecosystem, installed base, long-term service business growth, and attractive valuation as core rationale.

Core views

Key takeaways include: First, the deceleration in App Store revenue growth—particularly in the U.S., gaming, and photo/video categories—will continue to weigh on stock performance. Second, other Apple service segments such as iCloud, AppleCare, and subscription services still exhibit double-digit year-over-year growth momentum, supporting the outlook for third-quarter fiscal 2026 service revenue. Third, excessive market focus on slowing product revenue growth may underestimate the resilience of Apple’s ecosystem, the profitability contribution of services, and recurring revenue opportunities under the “Apple-as-a-Service” model. Fourth, over the next five years, gross margin expansion should primarily be driven by the services business, which could strengthen market recognition of Apple’s service-oriented investment narrative.

Analysis framework

The report employs Sensor Tower’s mobile app store net revenue estimates, disaggregating Apple App Store spending trends by month, region, and category, while integrating Goldman Sachs’ assessments of Apple’s fundamentals, valuation, service business growth, and installed base to form investment perspectives. The analysis also references Goldman Sachs forecasts, FactSet data, company disclosures, historical target prices, the GS Factor Profile, M&A Rank, and Quantum database frameworks to support rating and valuation conclusions.

Methodology notes

• Third-party Data TrackingSensor Tower App Store Net Revenue Estimates

  Tracking monthly net revenue, year-over-year, and quarter-over-quarter changes in Apple App Store and Google Play Store consumption trends.

  This method helps identify regional and categorical shifts in App Store revenue growth. Based on this approach, the report concludes that Apple App Store YoY growth slowed to around 5% in April 2026 and analyzes contributions from the U.S., China, Japan, and key categories like gaming, entertainment, and photo/video.

• Goldman Sachs Stock Factor FrameworkGS Factor Profile

  Comparing stocks against market benchmarks and industry peers across four dimensions: growth, financial returns, valuation multiples, and composite metrics.

  Growth metrics are based on forward-looking sales, EBITDA, and EPS growth; financial return metrics include ROE, ROCE, and CROCI; valuation multiples encompass P/E, P/B, EV/EBITDA, EV/FCF, among others; composite scores integrate growth, returns, and valuation appeal.

• M&A Probability FrameworkM&A Rank

  Goldman Sachs assigns companies a score from 1 to 3 indicating their likelihood of becoming acquisition targets, with 1 representing high probability and 3 low probability.

  The report discloses Apple’s M&A Rank as 3, signifying that M&A factors have minimal impact on the target price.

• Financial DatabaseQuantum

  Goldman Sachs’ proprietary database used to access historical financial statements, forecasts, and ratios.

  Quantum can be employed for in-depth single-company analyses or cross-industry, cross-market comparisons; in this report, it serves as one of the tools supporting corporate financial and valuation analysis.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AAPL.US

  Covers the company’s stock, maintaining a Buy rating and providing a 12-month target price.

  Strengths

  Apple boasts a strong brand, a vast installed base, high customer stickiness, long-term service business growth, privacy advantages, and a premium experience, along with enhanced recurring revenue potential through additional services and products.

  Weaknesses

  Slower App Store revenue growth, cyclical pressures on product revenue, extended iPhone upgrade cycles, and potentially weaker demand for PCs and tablets.

  Comparison

  Goldman Sachs argues that market attention to slowing product revenue obscures the resilience of Apple’s ecosystem and service revenue; the valuation remains attractive relative to Apple’s historical levels and key tech peers.

  Risks

  Major risks include weakening consumer demand, supply chain disruptions, intensified competition, regulatory challenges, and execution risks related to capital allocation.

• Apple App Store

  A critical revenue source within Apple’s services business and the central focus of this report.

  Strengths

  Long-term mobile app store spending demonstrates structural growth, with Apple contributing roughly two-thirds of overall app store revenue.

  Weaknesses

  YoY growth decelerated to 4.9% in April 2026, below both March levels and the recent April average; significant drag from gaming, photo/video, and U.S. markets.

  Comparison

  Compared to Google Play Store, Apple App Store generates larger revenues, yet its recent growth slowdown has drawn greater market scrutiny.

  Risks

  If App Store growth continues to slow, it could undermine market confidence in the pace of Apple’s service revenue growth and improvements in its profit structure.

Key data

• April 2026 Apple App Store Net Revenue YoY Growth Rate4.9%Down from March’s 6.2% and marking the lowest April YoY growth rate on record.
• Average April YoY Growth Rate from 2022 to 20258.8%April 2026’s roughly 5% growth rate is significantly lower than the recent multi-year average.
• U.S. App Store Spending Trend-5% yoyThe U.S. accounts for about 34% of total revenue, with a further weakening compared to March’s -2% YoY decline.
• China App Store Spending Trend+10% yoyChina contributes roughly 20% of total revenue, improving from March’s +7% YoY growth.
• Japan App Store Spending Trend-1% yoyJapan’s YoY decline improved slightly from March’s -3% YoY drop.
• Non-Top-3 Regions App Store Spending Trend-4% yoyNon-top-3 regions account for about 36% of total revenue, with a notable shift from March’s +8% YoY growth.
• Gaming Category Revenue Growth-2% yoyGaming makes up roughly 42% of App Store net revenue and has further decelerated from March’s -1% YoY decline.
• Entertainment Category Revenue Growth+5% yoyEntertainment accounts for about 15% of total revenue, improving from March’s +2% YoY growth.
• Photo & Video Category Revenue Growth+11% yoyPhoto & video make up about 8% of total revenue, with a slower YoY growth compared to March’s +15% YoY increase.
• Goldman Sachs Rating and Target PriceBuy, 12-month target price $340Based on a 34x multiple of NTM+1Y EPS, implying a 21.4% upside compared to the $280.14 closing price.

Impact & implications

In the short term, the slowdown in App Store growth may dampen market confidence in the quality and sustainability of Apple’s service revenue, particularly as weakness in the U.S. and gaming categories intensifies investor concerns about service business momentum. In the medium to long term, Goldman Sachs believes that double-digit growth in other service segments, a steadily expanding installed base, low customer churn rates, and increasing service attachment rates can still support Apple’s profit growth and valuation premium. The report implies that AAPL should closely monitor whether monthly App Store data continues to decelerate, though Goldman Sachs’ fundamental buy logic remains unchanged.

Risks

• Weakening consumer demand for Apple products and services, especially amid macroeconomic headwinds, increased device durability, or insufficient innovation leading to longer replacement cycles.
• Supply chain disruptions, particularly given the heavy reliance on China for final assembly and geopolitical tensions or tariffs impacting global trade.
• Intensified competition, as Apple faces formidable rivals across personal devices, video streaming, app distribution, advertising, music streaming, cloud storage, and more.
• Regulatory risks, with potential interventions in major markets forcing Apple to open proprietary products or services, thereby eroding competitive advantages.
• Capital allocation execution risks, including uncertain outcomes from mergers and acquisitions and possible declines in stock buyback returns or stricter regulatory scrutiny.
• Continued deceleration in App Store growth could become short-term pressure on AAPL’s stock price.

What to watch

• Whether App Store YoY and MoM growth rates remain below historical levels in subsequent months of 2026.
• Whether U.S. market spending recovers from April’s -5% YoY decline or continues to weigh on global growth.
• Whether gaming, photo/video, and other key categories further decelerate.
• Whether improvements in China and Japan offset weakness in the U.S. and non-top-3 regions.
• Whether Apple’s other service categories, such as iCloud, AppleCare, and subscriptions, sustain double-digit growth.
• Whether third-quarter fiscal 2026 service revenue approaches the level achieved in the second quarter after stripping out favorable exchange-rate effects.
• The impacts of regulation, supply chains, and consumer replacement cycles on Apple’s combined service and hardware portfolio.