Apple reported stronger-than-expected revenue and a bullish outlook driven by surging demand for its iPhone 17 and new MacBook Neo, pushing its shares up nearly 4% in after-hours trading.
The company said it expects revenue growth of 14% to 17% in the current fiscal third quarter, well ahead of Wall Street forecasts of about 9.5%, according to LSEG data. The upbeat projection, along with a fresh $100 billion share buyback, helped reassure investors as Apple navigates leadership transition and intensifying competition in artificial intelligence.
In the fiscal second quarter ending March 28, Apple posted revenue of $111.18 billion and earnings of $2.01 per share, both above analyst expectations. China stood out as a major growth driver, with sales rising to $20.5 billion, beating forecasts of $19.45 billion.
The iPhone remains Apple’s dominant product nearly two decades after launch, generating $56.99 billion in sales. That figure narrowly missed expectations, which Apple attributed to supply constraints on advanced processor chips used in the iPhone 17 line.
Chief executive Tim Cook said demand for the new model was exceptionally strong but limited by tight supply conditions in the semiconductor market. “The demand was off the charts,” Cook said, noting constraints in the global chip supply chain.
The MacBook Neo also contributed to results, with Mac sales reaching $8.4 billion, ahead of estimates. The entry-level $500 laptop, targeted at students, is seen by analysts as a potential entry point into a broader low-cost computing market long dominated by Chromebooks.
Services revenue, which includes the App Store and subscription offerings, climbed to $30.98 billion, also beating expectations despite ongoing regulatory pressure in Europe and other markets.
Profitability remained solid, with gross margins at 49.27%, higher than forecast, helped in part by existing memory chip inventories that shielded Apple from rising component prices. However, the company warned that memory costs are expected to increase in the coming quarters, with margins projected to ease slightly to between 47.5% and 48.5%.
Cook said Apple is also seeking refunds related to tariffs imposed during the Trump administration, with plans to reinvest recovered funds into US manufacturing.
While Apple continues to invest in artificial intelligence, it has avoided the massive spending seen at rivals, instead raising research and development expenditure by 33.5% to $11.42 billion.
The company also signalled a shift in its financial strategy, stepping back from its long-standing goal of achieving net cash neutrality. Chief financial officer Kevan Parekh said Apple may now maintain higher cash reserves to increase flexibility.
Apple is expected to share more details on its AI strategy at its developer conference in June, as investors watch closely how the company positions itself in a rapidly evolving technology landscape.
