Apple delivered an earnings report that “beat the numbers but lost on the stock price.”
After the market closed on November 2, U.S. Eastern Time, Apple released its fourth-quarter results for fiscal 2026 (the three months ended September 26): revenue of $114.48 billion, up 12% year over year and above market expectations of about $113.4 billion, marking the best September quarter in Apple’s history; diluted earnings per share of $2.10, topping expectations of $1.99; and net income of $30.71 billion. By business segment, iPhone revenue was $57.58 billion, up 17.5% year over year and a September-quarter record—even though the new iPhone 18 Pro had been on sale for only about nine days during the quarter. Services revenue reached a record $31.57 billion, while Mac revenue came in at $10.79 billion, also ahead of expectations. Full-year fiscal 2026 revenue totaled $479 billion, another record.
But the market wasn’t impressed. Before the results were released, Apple shares had already fallen 1.8% that day, closing at $338.32. They dropped another roughly 2.8% after hours, to around $329, then fell 1.90% on November 3 to close at $331.90. The stock became the biggest drag on the Dow Jones Industrial Average, which was down 0.38% on the day while other major indexes rose.
The problem lies in two areas. First, Greater China revenue was $17.54 billion, about $1.2 billion below the market’s expectation of $18.75 billion—the largest shortfall in the report. Second, and more critically, Apple’s gross margin guidance for the next quarter—its biggest holiday shopping season of the year—was just 45% to 46%, below the market’s expectation of 46.3% and down from 47.9% this quarter. Gross margin is the share of revenue left as profit after selling a device. A guidance range roughly two percentage points lower effectively tells the market that Apple will make less on every iPhone it sells going forward.
Memory is the main culprit behind the margin squeeze. The global buildout of AI data centers is driving a scramble for memory chips. Supplies of dynamic random-access memory (the working memory in phones and computers) and flash memory (the storage chips used for photos and files) are tight, and prices are rising. As one of the world’s largest memory buyers, Apple is among the first to feel the cost impact. Chief Financial Officer Kevin Parekh said on the earnings call that rising memory prices were the main reason for the margin decline, along with investment in the Siri AI upgrade. In his first earnings report since becoming CEO, John Ternus called the memory price increases “unprecedented” and said costs would continue to rise beyond December. Apple has already been stockpiling in advance: inventory jumped 31% in a single quarter to $14.54 billion. But stockpiling can only provide a temporary cushion; it cannot stop prices from rising.
Interestingly, this is the flip side of the same coin that saw the Philadelphia Semiconductor Index surge 2.63% and the Nasdaq Composite rise 0.83% that day. The AI boom is pushing up memory prices, bringing windfall profits and soaring share prices to memory sellers such as Micron Technology and SK Hynix. But for major memory buyers like Apple, the same price increases are eating into profits. The money from higher prices hasn’t disappeared; it has simply flowed from buyers’ pockets into sellers’ pockets.
Looking ahead, Apple’s story has two sides. In the short term, memory costs are a sword hanging over the company’s head. Revenue guidance for the December quarter calls for growth of 7% to 10%, which would still make it the highest-revenue quarter in Apple’s history. But if gross margin really falls to 45%–46%, and one-off benefits such as tariff refunds fade (this quarter’s earnings per share included $0.05 from $731 million in tariff refunds), profit growth will slow significantly relative to revenue growth. Guidance for Services growth has also slowed to 8%–9%. In the longer term, the first full quarter of iPhone 18 Pro sales is only just beginning, and Services continues to set records. There is no problem on the demand side: this sell-off reflects lower expectations for margins, not weaker demand.
Watch three signals: first, when memory prices peak and begin to fall—that is an early indicator of whether Apple’s gross margin can stop declining; second, whether actual gross margin in the December quarter can hold at the lower end of the 45% range; and third, whether Greater China can make up the shortfall during a full quarter of sales for the new devices. There are also plenty of risks. If memory prices keep rising into next year, Apple will have to either accept thinner margins or raise prices, as it has previously done with the iPad and Mac, passing costs on to consumers. Either path could keep pressure on the stock. And with market volatility rising after the U.S. midterm election results, anyone looking to buy the dip in the short term should leave a sufficient margin of safety.
The bill for the AI boom is moving from chipmakers’ earnings reports onto hardware makers’ cost sheets.
#苹果公司 #USStocks
After the market closed on November 2, U.S. Eastern Time, Apple released its fourth-quarter results for fiscal 2026 (the three months ended September 26): revenue of $114.48 billion, up 12% year over year and above market expectations of about $113.4 billion, marking the best September quarter in Apple’s history; diluted earnings per share of $2.10, topping expectations of $1.99; and net income of $30.71 billion. By business segment, iPhone revenue was $57.58 billion, up 17.5% year over year and a September-quarter record—even though the new iPhone 18 Pro had been on sale for only about nine days during the quarter. Services revenue reached a record $31.57 billion, while Mac revenue came in at $10.79 billion, also ahead of expectations. Full-year fiscal 2026 revenue totaled $479 billion, another record.
But the market wasn’t impressed. Before the results were released, Apple shares had already fallen 1.8% that day, closing at $338.32. They dropped another roughly 2.8% after hours, to around $329, then fell 1.90% on November 3 to close at $331.90. The stock became the biggest drag on the Dow Jones Industrial Average, which was down 0.38% on the day while other major indexes rose.
The problem lies in two areas. First, Greater China revenue was $17.54 billion, about $1.2 billion below the market’s expectation of $18.75 billion—the largest shortfall in the report. Second, and more critically, Apple’s gross margin guidance for the next quarter—its biggest holiday shopping season of the year—was just 45% to 46%, below the market’s expectation of 46.3% and down from 47.9% this quarter. Gross margin is the share of revenue left as profit after selling a device. A guidance range roughly two percentage points lower effectively tells the market that Apple will make less on every iPhone it sells going forward.
Memory is the main culprit behind the margin squeeze. The global buildout of AI data centers is driving a scramble for memory chips. Supplies of dynamic random-access memory (the working memory in phones and computers) and flash memory (the storage chips used for photos and files) are tight, and prices are rising. As one of the world’s largest memory buyers, Apple is among the first to feel the cost impact. Chief Financial Officer Kevin Parekh said on the earnings call that rising memory prices were the main reason for the margin decline, along with investment in the Siri AI upgrade. In his first earnings report since becoming CEO, John Ternus called the memory price increases “unprecedented” and said costs would continue to rise beyond December. Apple has already been stockpiling in advance: inventory jumped 31% in a single quarter to $14.54 billion. But stockpiling can only provide a temporary cushion; it cannot stop prices from rising.
Interestingly, this is the flip side of the same coin that saw the Philadelphia Semiconductor Index surge 2.63% and the Nasdaq Composite rise 0.83% that day. The AI boom is pushing up memory prices, bringing windfall profits and soaring share prices to memory sellers such as Micron Technology and SK Hynix. But for major memory buyers like Apple, the same price increases are eating into profits. The money from higher prices hasn’t disappeared; it has simply flowed from buyers’ pockets into sellers’ pockets.
Looking ahead, Apple’s story has two sides. In the short term, memory costs are a sword hanging over the company’s head. Revenue guidance for the December quarter calls for growth of 7% to 10%, which would still make it the highest-revenue quarter in Apple’s history. But if gross margin really falls to 45%–46%, and one-off benefits such as tariff refunds fade (this quarter’s earnings per share included $0.05 from $731 million in tariff refunds), profit growth will slow significantly relative to revenue growth. Guidance for Services growth has also slowed to 8%–9%. In the longer term, the first full quarter of iPhone 18 Pro sales is only just beginning, and Services continues to set records. There is no problem on the demand side: this sell-off reflects lower expectations for margins, not weaker demand.
Watch three signals: first, when memory prices peak and begin to fall—that is an early indicator of whether Apple’s gross margin can stop declining; second, whether actual gross margin in the December quarter can hold at the lower end of the 45% range; and third, whether Greater China can make up the shortfall during a full quarter of sales for the new devices. There are also plenty of risks. If memory prices keep rising into next year, Apple will have to either accept thinner margins or raise prices, as it has previously done with the iPad and Mac, passing costs on to consumers. Either path could keep pressure on the stock. And with market volatility rising after the U.S. midterm election results, anyone looking to buy the dip in the short term should leave a sufficient margin of safety.
The bill for the AI boom is moving from chipmakers’ earnings reports onto hardware makers’ cost sheets.
#苹果公司 #USStocks