Apple predicted a boom in iPhone demand during the holiday season. Do investors believe it?
Apple gave an optimistic outlook for the current quarter, its most important quarter because of the abundance of holidays, after which its stock rebounded sharply from a postmarket drop to gain more than 4%.
Details
Apple expects revenue growth in the current quarter (the first in its 2026 fiscal year) of 10-12% compared to the same period in 2024, the Financial Times wrote, citing the company's CFO Kevan Parekh. Apple expects iPhone sales to increase at double-digit rates in the current quarter, the newspaper added.
Apple's forecast was better than Wall Street's expectations, which was looking for revenue growth of 6%, the FT noted. Sales in the quarter, which includes Thanksgiving and Christmas, will be a record for the company and the iPhone, Apple CEO Tim Cook said in a conference call after the release of the statements, Bloomberg reported.
The first quarter will be the first full quarter with sales of the new iPhone 17 and iPhone Air. Last period included only the first two weeks when the devices hit the market. Signs of strong demand helped Apple's stock rise to a record, and the company's capitalization surpassed $4 trillion for the first time.
As Apple reported
In the previous quarter (the fourth in fiscal 2025, ended September 27) Apple achieved revenue growth of 8% year-on-year - to $102.47 billion. Analysts expected $102.24 billion, wrote CNBC, citing LSEG data. Adjusted earnings per share (diluted EPS) reached $1.85 - an increase of 13%. EPS beat Wall Street's forecast of $1.77 billion, Bloomberg noted.
At the same time, the revenue from the iPhone was worse than expected. It amounted to $49.02 billion, while analysts expected $50.19 billion, writes CNBC. But the iPhone remains the most popular product of the company. The second place in revenue is occupied by services - $28.75 billion. In third place - the category of wearable devices (Apple Watch and Vision Pro helmet), home devices (HomePod speakers) and accessories - $9 billion. Sales of Mac computers amounted to $8.73 billion, iPad tablets - $6.95 billion.
The growth of services, wearable devices and Macs turned out to be stronger than expected and helped Apple to compensate for the slowdown in mainland China - the company's most important market after the United States, Bloomberg writes. Apple's revenue in China fell by 3.6% to $14.49 billion. Analysts had hoped for $16.4 billion: the actual result reinforced fears that Apple was losing ground in this market, where it had previously been growing, the agency noted. Europe brought $28.7 billion, the U.S. market - $44.19 billion.
What about the stock
Apple shares initially fell by about 1% in extended trading immediately after the publication of the reports. But then the securities quickly changed the trend and began to grow - at the moment by almost 5%. The main trades ended with the growth by 0.63% - up to $271.4, which was a record for the securities at the close.
Apple shares are up 8.4% since the start of 2025 (excluding the Oct. 30 postmarket surge). They have a total of 53 ratings from analysts, and the most popular recommendation is "buy" (24 Buy and eight Overweight), MarketWatch shows. Meanwhile, 16 analysts advise Hold (Hold) and five advise Sell (three Sell and two Underweight). The average target price of $257.06 implies a 5% drop from the close of major trading on Oct. 30.
This article was AI-translated and verified by a human editor
