Apple Inc. (AAPL) delivered its strongest revenue growth in more than three years, reporting fiscal third-quarter sales of $94 billion—nearly $5 billion above Wall Street’s expectations.
The Cupertino-based tech giant saw iPhone sales surge past $44.5 billion, driven in part by tariff-fueled demand and the launch of the new $599 iPhone 16e. Growth was broad-based, with revenue rising across nearly all markets, including Greater China, where Apple pulled in $15.4 billion in sales—up roughly 4% from last year.
The iPhone's momentum marks a sharp reversal from a sluggish start to the year. Sales jumped 13.5% year-over-year, notching a record for the June quarter. Notably, Apple reported iPhone growth in every region it operates, with particularly strong gains in emerging markets.
CEO Tim Cook credited the boost to both a strengthening global demand environment and Apple’s ability to stay ahead of pricing impacts tied to newly imposed U.S. tariffs. “We saw an acceleration of growth around the world,” Cook said on the company’s earnings call.
Mac and Services Shine; iPad and Wearables Lag Behind
Apple’s Mac division also posted a strong quarter, with revenue up nearly 15% to $8.05 billion—beating analyst expectations by about $750 million. The launch of updated MacBook Air and Mac Studio models earlier in the year helped push the Mac installed base to an all-time high. Growth was particularly strong in Europe, Greater China, and the broader Asia-Pacific region.
The company’s Services business continued to shine, with revenue jumping 13% to $27.4 billion. That’s around $600 million more than what analysts had projected. The segment, which includes Apple TV+, Apple Music, iCloud, and the App Store, has now become Apple’s most consistent growth engine. Apple TV+ alone garnered a record 81 Emmy nominations, helping draw attention and subscriptions to the platform.
However, not all segments performed equally well. iPad sales fell 8% to $6.58 billion, largely due to a tough comparison against the prior year’s launch of new high-end models. Meanwhile, revenue from Apple’s Wearables, Home, and Accessories segment declined by nearly 9% to $7.4 billion. The Vision Pro headset—Apple’s $3,499 answer to mixed reality—failed to ignite significant demand and has yet to move the needle.
Apple’s Mac division also posted a strong quarter, with revenue up nearly 15% to $8.05 billion—beating analyst expectations by about $750 million. The launch of updated MacBook Air and Mac Studio models earlier in the year helped push the Mac installed base to an all-time high. Growth was particularly strong in Europe, Greater China, and the broader Asia-Pacific region.
The company’s Services business continued to shine, with revenue jumping 13% to $27.4 billion. That’s around $600 million more than what analysts had projected. The segment, which includes Apple TV+, Apple Music, iCloud, and the App Store, has now become Apple’s most consistent growth engine. Apple TV+ alone garnered a record 81 Emmy nominations, helping draw attention and subscriptions to the platform.
However, not all segments performed equally well. iPad sales fell 8% to $6.58 billion, largely due to a tough comparison against the prior year’s launch of new high-end models. Meanwhile, revenue from Apple’s Wearables, Home, and Accessories segment declined by nearly 9% to $7.4 billion. The Vision Pro headset—Apple’s $3,499 answer to mixed reality—failed to ignite significant demand and has yet to move the needle.
Tariffs, AI Uncertainty, and What Comes Next
Despite a better-than-feared showing, clouds remain on the horizon. Apple incurred $800 million in tariff-related costs last quarter—lower than the $900 million it had anticipated—but expects those costs to rise to $1.1 billion in the current quarter. Most iPhones sold in the U.S. are manufactured in India, placing Apple squarely in the crosshairs of escalating U.S. trade tensions. Investors are watching closely to see whether these added costs will eventually be passed on to consumers through higher prices.
Apple’s fourth-quarter revenue guidance—predicting mid- to high-single-digit growth—came as a welcome surprise to Wall Street, where consensus had hovered closer to 3%. But looming regulatory challenges to Apple’s App Store policies and its search partnership with Google (GOOG) could weigh on future Services revenue. The agreement with Google alone is estimated to bring in about $20 billion annually.
The company is also under increasing pressure to prove its artificial intelligence ambitions. While competitors like Microsoft (MSFT) and Nvidia (NVDA) have surged ahead with generative AI offerings, Apple has yet to unveil a competitive in-house solution. Cook acknowledged increased investment in AI but declined to provide specifics, signaling that Apple may be considering outsourcing its large language model efforts.
A Strong Quarter, but Eyes on September
Apple’s third-quarter performance sent a strong signal to the market: the company still knows how to deliver, even under pressure. Strong iPhone sales, rebounding growth in China, and continued gains in Services and Mac helped offset weaker areas like iPads and wearables. Investors will now look to the anticipated September launch of the iPhone 17 as a key test of Apple’s ability to sustain momentum.
Yet challenges remain. Tariffs are likely to weigh more heavily in the months ahead, and questions about Apple’s AI readiness continue to loom large. For now, however, Apple has delivered a reminder of why it remains one of the most closely watched—and deeply held—stocks in the world.
Apple’s third-quarter performance sent a strong signal to the market: the company still knows how to deliver, even under pressure. Strong iPhone sales, rebounding growth in China, and continued gains in Services and Mac helped offset weaker areas like iPads and wearables. Investors will now look to the anticipated September launch of the iPhone 17 as a key test of Apple’s ability to sustain momentum.
Yet challenges remain. Tariffs are likely to weigh more heavily in the months ahead, and questions about Apple’s AI readiness continue to loom large. For now, however, Apple has delivered a reminder of why it remains one of the most closely watched—and deeply held—stocks in the world.
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