CHENGDU, CHINA – MARCH 18: Apple CEO Tim Cook attends a special event commemorating Apple’s 50th anniversary held at Apple Taikoo Li Chengdu store in Chengdu, Sichuan, China on March 18, 2026.
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apple Shares rose more than 4% on Thursday, on track for their sharpest rally since August, after the iPhone maker reported better-than-expected quarterly results and issued a revenue outlook for the current fiscal year that beat analysts’ expectations.
Chief Executive Tim Cook, who is preparing to step down in September after 15 years at the helm, touted the company’s performance in the face of significant supply constraints, primarily due to a global memory shortage.
The company said sales for the fiscal third quarter ending in June would rise 14% to 17% from a year earlier, while analysts had expected 9.5% growth. Apple expects continued demand from the iPhone 17 family, which Cook called “the most popular lineup in our history,” as well as many Mac models.
Apple launched a low-cost computer called the MacBook Neo in March, but Cook said late Wednesday that customer response was “unexpected, with demand exceeding expectations.”
Analysts asked Mr. Cook for clarification, and he said he would “consider a variety of options” to address rising memory costs, but the CEO only believes the trend will get stronger. Investors didn’t get many answers, but they were mostly uninterested.
“While that creates some risk, following last night’s results we feel much better about Apple’s ability to manage margins than we previously expected,” Morgan Stanley analysts wrote in a note to clients on Friday. “This is the single largest source of predicting post-earnings upside.”
Analysts recommending the stock to buy raised their estimates for fiscal year earnings per share from $8.63 to $8.89.
Before announcing bullish guidance on its earnings call, Apple reported second-quarter revenue and profit beats. Revenue increased 17% to $111.18 billion from $95.4 billion in the same period last year. Analysts had expected sales of $109.66 billion, according to LSEG.
The company exceeded expectations for Mac sales and iPad sales and services, but fell short on iPhone sales. Apple continues to grow profits by strengthening its services business, which has much higher margins than hardware.
Services revenue for the quarter increased approximately 16% to $30.98 billion from $26.65 billion in the year-ago period. Apple leverages its massive customer base and more than 2.5 billion active devices in the marketplace to sell entertainment services and subscriptions to Apple Pay, iCloud, and AppleCare services.
Apple’s gross profit margin has long been in the low 30s, but has been steadily rising in recent years, reaching 49.3% in the latest quarter, up from 48.2% in the previous quarter. Apple said gross profit margin for the June quarter will be 47.5% to 48.5%.
Analysts at KeyBanc, which has the equivalent of a hold rating on the company’s stock, said Apple’s margin forecast “does not indicate expected memory price tightness.”
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