Apple expects September quarter revenue to grow between 9% and 11% from the prior year, below expectations.
- Q3 revenue reached $109.4 billion, up 16% year-over-year, with earnings per share of $2.02, beating Wall Street estimates.
- Q4 sales guidance of 9% to 11% growth, nearly $113 billion at midpoint, fell short of the $114.9 billion analyst consensus.
- Greater China sales came in at $18.8 billion, lower than the $19.6 billion expected.
Apple (AAPL) share price dropped about 7% after-hours after a disappointing autumn sales forecast triggered a sharp sell-off as industrywide component bottlenecks and soaring memory chip costs hit the tech giant.
The iPhone maker posted quarterly revenue of $109.4 billion, a 16% increase from $94 billion in the same period last year, and earnings rose to $2.02 per share from $1.57 a year earlier, easily surpassing the consensus estimate of $1.89 per share among Wall Street analysts.
Despite the earnings beat, Apple stock tumbled after CEO Tim Cook signaled that persistent supply chain friction and foreign exchange headwinds would curb revenue expansion in the coming months.
Soaring AI datacenter demand has pushed prices for DRAM and NAND storage to historical levels, as companies continue to build out large datacenters to fuel growth in AI agent and inference usage.
Apple’s September Quarter Outlook Riddled With Memory Constraints
Apple management advised investors to expect total company revenue to grow between 9% and 11% year-over-year for the fiscal fourth quarter ending in September. At the midpoint, that translates to around $113 billion in revenue—failing to reach the $114.9 billion average projection modeled by financial analysts.
During the post-earnings conference call, company management alarmed that hardware supply limitations will constrain output across the iPhone, Mac, and iPad product lines throughout the September period.
A primary driver behind the margin and supply pressures is an unprecedented surge in memory chip pricing. Chief Executive Officer Tim Cook described the cost environment as a “100-year flood on memory pricing,” driven by exponential price increases in dynamic random-access memory (DRAM) as artificial intelligence infrastructure consumes global supplies.
Revenue Mix And Leadership Transition
iPhone revenue served as the standout highlight, surging 22% year-over-year to $54.3 billion and topping consensus expectations of $53.6 billion. Mac sales expanded 29% to $10.4 billion—well ahead of the $8.62 billion consensus—fueled by spring product releases such as the entry-level MacBook Neo and M5-powered MacBook Pro models.
Conversely, iPad sales lagged at $6.19 billion against the $6.89 billion anticipated by analysts. Services revenue rose 12% to $30.7 billion, missing the $31.4 billion forecast, while Greater China sales came in at $18.8 billion, below expectations of $19.6 billion.
The financial results mark the final full earnings release under Cook’s 15-year tenure as chief executive. Cook, who oversaw Apple’s growth into a nearly $5 trillion market valuation, will turn over the chief executive role to hardware chief John Ternus on Sept. 1. Ternus steps into the lead post as Apple ramps up its research and development expenditure—up 32% to $11.7 billion this quarter—to accelerate its generative artificial intelligence roadmap and expand next-generation hardware offerings.
AAPL Stock: Retail View
Retail sentiment on Stocktwits was ‘bearish’ with ‘high’ message volumes. Retail chatter on the stock gained about 160% over the past week.
One user highlighted Apple being among the largest buyers of memory storage.
https://stocktwits.com/moazzam0/message/660530785
AAPL stock has gained 22.3% year-to-date.