(Reuters) – Apple Inc’s results will be dissected more closely than ever next week, after a share swoon raised concerns on Wall Street that the stock’s gravity-defying rally may be losing steam.

Five straight days of stock losses for the world’s most valuable company sparked fears it had ventured into dreaded bubble territory and was overdue for a strong pullback. Shares reversed course on Tuesday, gaining 5 percent.

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 ahead of Apple’s second-quarter earnings next Tuesday.

There’s reason for caution: Apple’s shares surged nearly 60 percent to a high of $644 this year. The slightest sign of trouble in the earnings report may prompt further profit-taking.

"Any disappointment in Apple could lead to a significant selloff in the short term," said Channing Smith, co-manager at Capital Advisors Growth Fund. "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.’"

Apple shares fell 7 percent when the company missed Wall Street expectations for the first time in years last October.

Should investors choose to park their cash elsewhere, many believe they will eventually return.

Most investors remain bullish on the longer-term — 45 out of 53 Wall Street investment banking analysts still have "Buy" or "Strong Buy" ratings on the stock, citing robust iPhone and iPad sales and new products from a TV to a 4G iPhone coming down the
pike.

They argue that Apple will again reveal a bumper quarter, attributing the nearly 9 percent slump in the stock since last Tuesday to a combination of pre-earnings caution and profit-taking, and successive strings of sell orders triggered as the lofty shares
retreated.

In the days leading up to the selloff, at least two analysts predicted the stock will vault over $1000. Wall Street analysts on average expect it to touch $675 in the next 12 months.

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