Shares slide on guidance and supply warnings
Apple shares fell 7.4% to $308.91 in New York on Friday, the company's biggest single-day drop since April 3, 2025, after Thursday evening's post-earnings conference call guided to fiscal fourth-quarter revenue growth of 9% to 11% — below the more than 12% analysts had expected. The People summary of the call noted shares dropped roughly 6% during the call itself, with the gap reflecting intraday volatility before Friday's close. The slide cut into a year-to-date gain of 23% that had lifted Apple briefly toward a $5 trillion market capitalization earlier in August; the company's market value now stands at about $4.5 trillion.
June quarter: revenue and iPhone beat, iPad and China miss
Total sales climbed 16% year over year to $109.4 billion, topping estimates, while iPhone revenue rose 22% to $54.3 billion versus the $53.6 billion analysts had projected. Mac revenue grew about 29% to roughly $10.4 billion, helped by new models launched in March including the MacBook Neo, M5 versions of the MacBook Pro and a refreshed MacBook Air. iPad revenue of $6.19 billion missed the $6.89 billion estimate, and Greater China sales of $18.8 billion fell short of the $19.6 billion projection. Earnings rose to $2.02 a share for the quarter ended June 27, compared with an average estimate of $1.89.
Component shortages and currency drag
Apple said it is struggling to secure enough processors and to cope with fast-rising memory costs, conditions that prompted price increases on Macs and iPads last month and have extended wait times on key computers like the Mac mini and Mac Studio. On the call, Chief Executive Officer Tim Cook said constraints would hit more Macs, iPhones and iPads in the current quarter and described the memory-cost situation as a "100-year flood," attributing chip shortages to higher-than-expected demand for the iPhone 17 line and MacBook Neo. Management also guided for a roughly 2.5 percentage-point foreign-exchange headwind in the September period.
Services decelerate under App Store and gaming pressure
Services revenue grew 12% to $30.7 billion, short of the $31.4 billion analyst projection and a step down from the segment's recent pace. Management warned that growth would decelerate further in the September quarter, citing App Store regulatory changes in the European Union and elsewhere that let developers collect subscription payments directly and bypass Apple's fee, alongside softer-than-anticipated gaming revenue. The People summary of the call nonetheless noted that cloud services and payment services hit all-time highs, that paid subscriptions crossed 1.5 billion, and that Apple Pay reached record users in developed and emerging markets.
Cook's final quarter and the Ternus handover
The June quarter serves as a transition moment: Tim Cook, Apple's CEO since 2011, will hand the reins to hardware head John Ternus on September 1, with the upcoming iPhone launch quarter likely to be Ternus's first in charge. Apple said it is planning several new Macs and iPads across the end of this year and into next spring that could help lift sales, including the first touch-screen MacBook and a revamped iPad mini.
AI strategy and capital intensity in focus
Cook opened the call by emphasizing demand and Apple's artificial-intelligence roadmap, describing Apple Intelligence and the new Siri as "profoundly capable, deeply personal, and integrated seamlessly across our platforms" and citing "phenomenal" early developer and public-beta feedback. Asked whether Siri AI would make Apple more capital-intensive as requests route across on-device processing, Apple's own infrastructure and third-party clouds, Cook said Apple would keep a hybrid approach while increasing AI spending across research, operating expenses and infrastructure. The quarter also brought the launch of an Apple Upgrade hardware-leasing program with Klarna, with new Apple Cash capabilities — including bill splitting using Visual Intelligence — planned for later this year. The next concrete milestones investors will track include the September 1 leadership transition, the debut of next-generation iPhones in the September quarter, and the rollout of new Mac and iPad models later this year and into spring 2027.
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