Apple delivered stronger than expected earnings in its latest quarter, driven by robust iPhone sales and a rebound in revenue from China two critical areas that had faltered over the past year.
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The tech giant reported $44.5 billion in iPhone revenue for the quarter ending in June, easily beating Wall Street expectations of $40 billion and improving on the $39.3 billion recorded during the same period last year. Overall revenue rose 10% year-over-year to $94 billion, signaling steady performance despite mounting competitive pressures.
In China, a market where Apple has struggled recently, rose to $15.3 billion up from $14.7 billion in the third quarter of 2024 marking a modest but notable turnaround.
The results offered some relief to investors concerned about Apple’s momentum, particularly as it falls behind rivals in the fast-moving artificial intelligence race. Shares climbed just over 2% in after-hours trading an underwhelming reaction compared to Microsoft and Meta, whose shares jumped nearly 7% and more than 9%, respectively, on Wednesday following strong AI-fueled earnings.
Apple CEO Tim Cook acknowledged growing trade pressures, warning that the company could face up to $1.1 billion in tariff-related costs in the September quarter an increase from $800 million the previous quarter as it braces for potential new policies under President Donald Trump.
Yet, despite the solid performance, Apple continues to face questions about its long-term AI strategy. Analysts on the earnings call pressed Cook on the company’s roadmap for integrating AI into its products and whether the iPhone can remain central in an AI-driven world.
Cook remained confident. “We believe the iPhone will remain indispensable as AI becomes increasingly woven into daily life,” he said, reaffirming Apple’s commitment to evolving its flagship device while adapting to emerging technologies.
Still, Apple stock remains down nearly 15% year-to-date, lagging behind a broader market rally fueled largely by investor enthusiasm around AI, a sector where Apple has yet to make a defining move.