Apple earnings recap: Stock tumbles 6% as Tim Cook warns of ‘very significant’ supply constraints
31.07.2026
Michael M. Santiago/Getty Images
Apple delivered an earnings beat on both the top and bottom lines for its fiscal third quarter on Thursday, but its stock sank 7% after CEO Tim Cook warned that its supply chain was facing “very significant constraints.”
Apple’s services business, iPad segment, and China sales all came in below Wall Street’s estimates. The company’s revenue growth guidance for the current quarter came in below Wall Street estimates.
The company’s all-important iPhone sales came in slightly above estimates, at $109.4 billion for the quarter, compared with $108.85 billion. Earnings per share were $2.02, beating analysts’ estimates of $1.89. Mac revenue smashed expectations, coming in at $10.35 billion compared to estimates of $8.62 billion.
This marks CEO Tim Cook’s final earnings cycle as CEO, with “product guy” and hardware boss John Ternus taking over on September 1st. Cook will remain on as executive chairman.
Ternus is inheriting the helm as Apple’s stock has been the best performer in the elite group of mega-cap tech names this year, up 25%. The company surpassed a $5 trillion market cap for the first time earlier this week, then fell slightly.
But Apple’s analyst call made it clear the incoming CEO will face supply chain challenges, an area that has been Cook’s specialty.
Apple raised hardware prices in June in a move it said would help offset rising memory costs amid a global shortage. Cook said it was too early to know the impact of the price hikes, which have not yet included the iPhone.
“The primary issue is advanced nodes that we run our SOCs on,” Cook said on the analyst call, referencing supply constraints of its system-on-a-chip silicon. “That’s the primary supply constraint now, and the root cause of it is not a regular supply issue. It’s a demand forecast issue.”
“We’ve been pulling supply ahead, and at some point, there’s a limit to that, and so we’ve got a quarter that we’re going to be scrambling on the supply side, essentially,” Cook said.
Scroll on for the complete play-by-play of Apple’s earnings call:
That’s a wrap! Apple’s stock is trading down 6.7% after hours as the analyst call concludes.
Thanks for joining — see you next quarter!
Apple CFO walks through gross margin impacts
Apple’s gross margin at the company level for fiscal Q3 was 48.1% after adjusting for the tariff refund, compared to 49.3% in the prior quarter. Apple’s CFO chalked up that decrease mostly to rising memory costs.
“While FX was a factor, really the main driver was really the memory cost impact,” he says. “And as Tim outlined earlier, when we talked a bit about you know the dynamics around the memory costs, we did see some partial offsets from things like the benefit of carrying inventory reduction in non-memory component costs, and some favorable mix.”
Cook’s final earnings question as CEO: What to do in the EU?
For his final investor call as Apple CEO, Cook’s last question is about the company’s plans around the globe. Siri AI is not currently coming to Europe, he highlights, unless there are regulatory changes.
“If you look at the EU, we’re working closely with the Commission,” Cook says. “Obviously, our complete desire is to launch everything everywhere at the same time. That’s always the philosophy that we have. We have not been able to do that in the European Union, but we’re working closely with them to try to get to something that would allow us to offer Siri AI there.”
Apple’s incoming CEO speaks!
We just got our first — very brief — response from incoming CEO, John Ternus, on this call. He was asked about Apple’s growing competition from OpenAI and SpaceX.
“I would just say reiterate what Tim said,” Ternus says. “There is so much opportunity for us with everything that’s happening in this space, and we’re just really focused on our plans and very excited about it.”
The impact of Apple’s recent price hikes is inconclusive so far, Cook says
Cook says of the recent Mac and iPad price hikes: It’s “just too early to come to a definitive conclusion of what happens there.” He says Apple is waiting to see how the supply chain and consumers respond before locking in the pricing changes for good.
A theme on this analyst call? Lots of congrats to Tim Cook.
Nearly every analyst has begun their questions in the live Q&A by congratulating Cook ahead of his coming departure from the CEO role. We haven’t heard from incoming CEO John Ternus yet.
Tim Cook talks about Apple’s “competitive weapon” in AI.
Cook hypes up the new Siri AI, and “where it is going,” and says early feedback has been strong. Being able to run “some percentage” of AI requests on-device is “strategic” and a “competitive weapon.”
Apple CFO says foreign exchange will “continue to be a headwind.”
“This is a theme that’s impacting the services business more so than the total company,” Apple’s CFO says. “We expect foreign exchange to drive about a five percentage point headwind to the year-on-year growth rate from the March to September quarter.”
Apple’s price hike “reluctance”
Cook says Apple “reluctantly raised prices” on its Macs and iPads. He again called recent memory constraints a “100-year flood”- type event.
Cook says there’s a “limit” to how much supply you can pull ahead.
“The primary issue is advanced nodes that we run our SOCs on,” Cook says, referencing system-on-a-chip silicon. “That’s the primary supply constraint now, and the root cause of it is not a regular supply issue. It’s a demand forecast issue.”
“We’ve been pulling supply ahead, and at some point, there’s a limit to that, and so we’ve got a quarter that we’re going to be scrambling on the supply side, essentially,” Cook says.
Cook: “This isn’t a partner or supplier issue”
Talking about silicon supply constraints, Cook emphasizes that the “incredibly strong” iPhone and Mac product supply cycle is at the crux of the supply constraints, not an issue with a particular partner or supplier.
Apple is working through its compute plan for Siri AI
AI is expensive. That’s a new challenge for an AI-powered Siri. “In terms of what it means for compute cost, it’s obviously early going for us, and so I don’t want to say that we have a complete plan for that,” Cook says.
Apple’s guidance for the current quarter underwhelms Wall Street
Wall Street is balking at Apple’s guidance color for the current quarter, which ends in September. Apple expects total revenue growth of 9% to 11% year over year — that’s below Wall Street’s estimate of 12.1%.
Apple says that it will be affected by two main factors.
“First, when we look at kind of going from the June quarter to September quarter, we expect foreign exchange to be a sequential headwind of around two and a half percentage points to the year-over-year total company growth rate,” Cook says.
“And then the second impact is that the impact in supply constraints is we expect that to increase significantly when we go sequentially from June to September, and that projected supply constraint in the September quarter will affect the iPhone, Mac, and the iPad, and really, when you combine those two factors, we get pretty close to the June overall total company growth rate.”
Cook wants more DRAM suppliers
The US only has three DRAM suppliers, Cook points out. That gives those producers a lot of pricing power in the market. “If there were more suppliers, that would be good, and it would help us on the supply side and perhaps the pricing side,” he says.
The stock is down over 7% after hours after Apple flags “very significant constraints.”
Apple famously doesn’t provide full revenue estimates for the year, but it shares tidbits about what it’s watching in future quarters. The main worry for the next three months that Apple is highlighting is the ability to build enough iPhones.
Apple says there are“very significant constraints” that impact iPhone, iPad, and other devices.
Cook is really emphasizing Apple’s worries about memory shortages. He reiterates that iPhone production could be constrained. That’s important because Apple hasn’t yet raised iPhone prices (unlike the Mac).
Tim Cook says the CEO transition is going “seamlessly.”
Cook thanks the analysts and investors. He calls incoming John Ternus “one of a kind” and says that he couldn’t be more confident in his leadership.
Apple CFO talks services milestone: 1.5 billion in paid subscriptions
While Apple’s services business came in below Wall Street’s estimates, Apple CFO Kevan Parekh says the company is feeling some momentum. “Our services continue to attract more customers, and we have now surpassed one and a half billion in paid subscriptions,” he said.
Apple CFO: Disney is increasingly using Macs to save on AI token costs.
“More companies are choosing Mac for on-device AI advantages, including lower costs, better performance, and enhanced privacy and security,” Parekh says.
“At Disney, creative teams are increasingly turning to Mac for on-device AI workflows that reduce overall cloud token costs and keep their IP secure.”
Apple’s CFO is up next, going over the past quarter’s numbers.
We might hear from incoming CEO John Ternus after CFO Kevan Parekh finishes his prepared remarks.
Cook: “I’ve never been more confident that the best is yet to come”
In closing his prepared remarks, Cook projects optimism about the company’s direction. “I couldn’t be more excited to watch our phenomenal story of innovation continue to unfold, and I’ve never been more confident that the best is yet to come.”
Apple’s tariff refunds are a “re-investment,” Cook says
Cook is talking about Apple’s plans to manufacture device parts and chips in the US. It comes as the company just received a major financial boost from tariff refunds, which Cook says it will reinvest in the US.
President Donald Trump has previously said he would keep track of companies that didn’t apply for tariff refunds even though they could. Apple’s saying its tariff refunds will be reinvested in the US is an example of Cook’s political maneuvering. He’s known as Apple’s “Trump whisperer.”
Tim Cook is taking a victory lap, hot on the heels of Apple TV award nominations
“It was wonderful to see Apple TV earn the industry’s top honors, adding Tony Awards this year to its Emmy, Grammy, and Oscar wins,” Cook says. “We reached that milestone faster than any streamer in history.”
He also shouts out Apple’s Emmy nominations.
“Widows Bay also stands out as the year’s most nominated new program, earning 19 Emmy nominations,” he adds.
Ted Lasso is coming back
Cooks is highlighting the forthcoming season of Apple TV’s breakaway show, Ted Lasso.
Siri AI is getting lots of love from Cook
Cook keeps talking about how much better the new Siri AI will be. The voice assistant’s fall update will be “intuitive and useful, while also deeply integrated in a way that’s personal and private,” he says. The new Siri will publicly launch in September alongside the new iPhone lineup.
Cook touts blowout Mac sales
“Mac delivered its best June quarter yet with $10.4 billion in revenue, growing an impressive 29% from a year ago, despite significant supply constraints,” the CEO says.
Cook says Macs are great AI machines too.
“We’re seeing customers increasingly put those capabilities to work, from using Mac Mini as a powerful platform for agentic AI to deploying clusters of Mac Studio systems to run frontier-class models locally, across the lineup. Customers continue to embrace the Mac family,” Cook says.
The iPhone is on a tear
Sales of the iPhone are up everywhere around the globe, Cook says. He said it’s because the phone is the“most powerful and most popular iPhone lineup we’ve ever had.”
Tim Cook is “thrilled” about the new Siri AI, which is currently in beta but launches in September.
Cook says he’s excited about the early response to the newly overhauled Siri. He’s called it an “overwhelmingly positive reaction.”
Tim Cook begins his (final) prepared remarks by shouting out the June quarter revenue record.
For his final earnings call as CEO, Tim Cook is taking a victory lap. He’s highlighting new revenue records of various Apple segments.
Update: Incoming CEO John Ternus is on the call.
We’ll hear from him shortly. First up is Tim Cook.
And we’re off! Apple’s analyst call begins.
Outgoing Apple CEO Tim Cook will be on the call (his last as chief executive). So will CFO Kevan Parekh. One question is how much we’ll hear from incoming CEO John Ternus…
Apple CFO touts record install base
“We are very pleased with our record business performance during the quarter, which set new June quarter records for both EPS and operating cash flow,” Apple CFO Kevan Parekh said in the release. “Our installed base of active devices also reached a new all-time high across all major product categories and geographic segments.”
Apple’s China sales come in below estimates
Apple’s China revenue was lower than Wall Street expected, coming in at $18.8 billion, while analysts had expected more than $19 billion. Still, it’s a massive bump compared to last year’s $15 billion in the same quarter.
Wall Street doesn’t like the results
Apple’s stock continues to slip in after-hours trading, now down over 4% ahead of the 5 p.m. ET analyst call.
Cook touts “strongest June quarter ever.”
“Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment,” CEO Tim Cook said in the earnings release. “At WWDC26, we were thrilled to introduce the all-new Siri AI, alongside all of Apple’s latest software innovations and important new child safety features.”
APPLE EARNINGS ARE OUT: The key numbers
Revenue: $109.4 billion vs. $108.85 billion estimate
EPS: $2.02 vs. $1.89 estimate
iPhone revenue: $54.3 billion vs. $53.6 billion billion estimate
Services revenue: $30.74 billion vs. $31.36 billion estimate
Mac revenue: $10.35 billion vs. $8.62 billion estimate
iPad revenue: $6.2 billion vs. $6.89 billion estimate
Wearables, home, and accessories revenue: $7.88 billion vs. $7.87 billion estimate
China revenue: $18.81 billion vs. $19.58 billion estimate
Gross margin: 50.1%
We’re about 15 minutes out from Apple’s earnings release…
The stock closed down 1.4% but is trading up less than 1% in after-hours trading.
Tim Cook gets ready to say goodbye (kinda)
Tim Cook is stepping down as CEO effective September 1, making Thursday’s earnings call his last as the company’s chief executive. John Ternus, Apple’s senior vice president of hardware engineering, will take over as Cook will become executive chairman of Apple’s board of directors.
We heard briefly from Ternus on last quarter’s earnings call — he might take on a larger role on today’s call. During the company’s Worldwide Developers Conference in June, Cook called his time as CEO the “honor of a lifetime.”
Cook will continue to be involved in Apple’s business to some extent. In the press release announcing the decision, Apple highlighted that Cook, who has maintained a close relationship with President Donald Trump, will continue “engaging with policymakers around the world.”
Siri is (finally!!!) getting an overhaul
Apple shows off its new Siri AI during WWDC 2026
Apple
After years of delays and criticism, Apple finally unveiled its rebuilt version of Siri at its annual developer conference in June. It’ll get a new name: Siri AI. The company says Siri AI will hold more natural conversations, understand what users are viewing onscreen, draw on information from their emails and messages, and complete tasks across multiple apps.
Some users have started using the beta version of Siri AI. So far, they’re largely saying it’s a massive improvement over the current versions. A full launch is expected in the fall via a September software update. The big question: will it boost iPhone sales?
Apple is suing its AI partner, OpenAI, over trade secrets
Apple and OpenAI have a deal that makes ChatGPT available in iOS and Siri. They’re also quickly becoming hardware rivals.
Apple sued the ChatGPT maker in July, accusing OpenAI and former Apple employees of stealing trade secrets. OpenAI has denied having any interest in Apple’s confidential information. It comes as OpenAI is racing to build its own physical consumer products to support its AI business — a product that, if successful, could challenge the iPhone’s dominance.
There are several Apple vets who now call OpenAI their employer, chief amongst them former Apple design boss Jony Ive. Don’t expect Apple to get into the details on its earnings call, but there could be a question from Wall Street analysts about the competitive landscape of AI devices.
Apple never made its own car. Now, it’s providing software brains to Ford.
Apple’s plan to build its own car was famously put on ice, but the tech company still has an important role in Detroit. Last week, Apple and Ford announced a partnership to integrate Apple Maps into the automaker’s next-generation electric vehicles, starting with its coming $30,000 pickup truck.
Apple’s software will run natively through the vehicle and communicate with certain components, including the battery charging system and self-driving capabilities. That’s a big change for Ford.
The car company’s CEO, Jim Farley, told the “Decoder” podcast in 2025 that he wasn’t impressed with Apple’s CarPlay updates, called Ultra, which moved the software beyond phone mirroring and into a car’s climate controls and odometer. “We don’t like the execution in round one of Ultra, but we’re very committed to Apple,” Farley said at the time. “I’ve talked to Tim many times about this.”
BofA sees Apple’s lease program as bullish
In a note on Tuesday, Bank of America highlighted Apple Upgrade, which Apple announced earlier this week. The new offering allows customers to lease products such as iPhones, Apple Watches, and iPads on a monthly payment plan.
“In our view, Apple Upgrade is directionally positive, with potential upside from lower affordability friction, premium mix, faster replacement cycles, greater direct engagement and residual-value monetization,” Wamsi Mohan, an analyst at the bank, said in a July 28 note.
Look for Apple to offer any clues on the program’s potential on Thursday.
Bank of America has a “Buy” rating on Apple, and a price objective of $380 a share, implying about 11% upside from current levels.
You can now lease your iPhone like a car
Earlier this week, the company launched a new program called Apple Upgrade in partnership with Klarna that allows shoppers to lease iPhones, Watches, Macs, and iPads. It acts like a car lease, but for new tech, and offers lower monthly payments than financing a new iPhone.
A base iPhone 17e leased through Apple Upgrade is $17.99 a month, while financing the same phone costs $24.95 a month.
At the end of the term, customers can return the device, trade it in for a newer model, or pay the remaining balance to keep it.
Goldman eyes services-fueled growth for years
Goldman expects Apple to post 18% year-over-year revenue growth, beating Wall Street’s 15% estimate, thanks in part to strong iPhone and Mac sales. The bank reports an earnings beat of $1.93 per share, versus the $1.89 consensus.
Goldman has a “Buy” rating on the stock and said it expects the company’s service offerings, such as iCloud+ and AppleCare+, to be a leading driver of its growth going forward.
“The majority of gross profit growth over the next 5-years should be driven by Services, which should mark an inflection point in the Services investment narrative and support AAPL’s premium multiple,” Michael Ng, an analyst at the bank, said in a July 27 note.
The bank’s price target for the stock is $370 a share.
Earnings arrive shortly after price hikes
Kevin Carter/Getty Images
Apple increased prices across its Mac and iPad lineups on June 25, but has — so far — spared the iPhone from similar hikes. Analysts expect the tech company to raise the iPhone 18’s prices at the September launch. CEO Tim Cook or CFO Kevan Parekh might field questions on potential iPhone price hikes on the analyst call.
The increases stem from a memory crunch that’s making it harder to build tech hardware.
Those price hikes will have a negligible impact on this quarter’s earnings. Thursday’s call only covers until June 30. Moving forward, that will likely drive up the average sale price of its hardware.
Still, we’re keeping an eye on how Apple sells these price hikes to investors.
Apple’s memory crunch
The tech industry is racing to secure memory chips — and the squeeze is driving up Apple’s costs.
AI data centers are consuming enormous quantities of high-end memory, prompting chipmakers to devote more of their production capacity to the booming market. That has tightened supplies and raised prices for the memory and storage chips used in consumer devices such as iPhones, Macs, and iPads.
Tim Cook has likened that upheaval to a “100-year flood.”
As those components become more expensive, Apple has begun passing some of the costs on to shoppers — a move the company rarely makes. In late June, Apple raised prices across much of its Mac and iPad lineups, with increases ranging from roughly $100 to more than $1,000 on certain models and configurations.
Apple is scheduled to release the iPhone 18 in September. Analysts predict it will carry higher prices than the current model.
AI strategy still in question, Morningstar says
Dave Sekera, Morningstar’s chief US market strategist, said in an email that Apple would be the “least interesting” of all the mega-cap firms this earnings season, as they’ve largely stayed out of the AI conversation.
He said the main questions around the firm would be how they can offset rising memory costs and whether their higher iPhone 18 prices will cause a spike in iPhone 17 sales.
But Sekera still wants to hear from the company on its AI strategy.
“With Apple, I think we need a better discussion of what they think AI use cases are going to be,” he said. “Apple has steered clear of capex spending on the AI buildout boom, which I think will probably serve them well over the longer term, but for now, we’re still not really understanding Apple’s killer case for AI that will drive a lot of new economic value for individual users.”
Jefferies is cautious ahead of results
Jefferies thinks Apple’s stock has downside over the next 12 months, with its base-case price target of $308.92 a share, implying about 10% downside.
The bank said it expects Apple to have missed on gross margins last quarter and that memory costs will be a problem for margins going forward.
“Although AAPL’s premium iPhone roadmap and ability to raise prices would partly offset higher memory costs, margin is on the downside,” said Edison Lee, an analyst, in a July 27 client note.
Wall Street expects Q3 revenue of $108.85 billion, EPS of $1.89
