Apple (NASDAQ: AAPL) shares climbed in premarket trading after the company delivered a better-than-expected revenue forecast, signaling resilient iPhone demand and strength in its services business—even as challenges persist in the Chinese market.
Outlook Beats, Calms iPhone Concerns
Apple executives projected low to mid-single-digit revenue growth for Q2, topping analyst estimates. The upbeat guidance eased concerns over iPhone sales, which dipped slightly during the holiday quarter due to limited AI feature availability in some regions.
CEO Tim Cook said the upcoming launch of “Apple Intelligence” has already sparked renewed interest in the company’s products.
Balanced AI Strategy Pays Off
Unlike its Silicon Valley peers, Apple has been conservative in AI infrastructure spending, avoiding the market volatility driven by aggressive AI investment trends.
Q1 Snapshot: Mixed, but Services Shine
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EPS: $2.42 vs. $2.36 expected
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Revenue: $124.3B vs. $124.12B expected
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iPhone Revenue: $69.14B vs. $71.03B expected
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Services Revenue: $26.34B vs. $26.09B expected (+14% YoY)
Apple’s services segment continues to show solid momentum, offsetting hardware softness and contributing to overall stability.
China Drag Continues
Revenue from Greater China fell 11% to $18.5B, missing expectations of $21.57B. Fierce local competition, particularly from Huawei, remains a key headwind.
DA Davidson’s Gil Luria described the results as “a mixed bag,” noting that while China poses a concern, Apple’s global brand strength and services expansion offer long-term resilience.