Apple exceeded Wall Street expectations for its fiscal third quarter on Thursday, driven by stronger-than-expected iPhone sales, although its shares fell 4 per cent in after-hours trading as investors weighed the company’s recent stock rally against its latest results.
The technology giant reported earnings of $2.02 per share on revenue of $109.42 billion for the quarter, surpassing analysts’ forecasts of $1.89 per share on revenue of $108.86 billion.
The company’s flagship iPhone business remained the primary growth engine, with iPhone revenue climbing 21.7 per cent year-on-year to $54.25 billion, extending Apple’s strongest run of smartphone growth since the pandemic-driven upgrade cycle. The latest figures mark the third consecutive quarter in which iPhone sales have increased by more than 20 per cent.
Despite the earnings beat, Apple shares slipped in extended trading. The decline followed a strong run-up in the stock, which had gained 22.7 per cent since the start of the year, outperforming all of its Magnificent Seven peers. Earlier this week, Apple briefly became the first listed company to surpass a $5 trillion market capitalisation.
The robust iPhone performance has helped ease investor concerns over Apple’s comparatively cautious approach to artificial intelligence. Unlike several of its largest technology rivals, the company has invested far less in AI infrastructure, choosing not to match the hundreds of billions of dollars being committed to the sector by competitors.
Demand for the recently launched iPhone 17 range, particularly the premium Pro models, has underpinned the latest growth. Market research firm Counterpoint expects Apple to increase its market share across smartphones, personal computers, tablets and smartwatches this year, with the first three categories forecast to reach record market share levels.
Apple’s restrained spending on artificial intelligence has also proved advantageous in recent weeks, as investors have become more cautious about companies making heavy AI investments. That sentiment, coupled with sustained demand for its hardware, helped lift Apple shares by more than 15 per cent during July before the earnings announcement.
The latest results reinforce Apple’s ability to generate strong financial performance through its core hardware business, even as investors continue to seek clearer evidence of how the company intends to translate artificial intelligence into a significant long-term source of revenue.
