Key takeaways
- Apple reported record quarterly revenue of $114.48 billion
- Despite strong earnings, rising memory-chip costs and weaker holiday-quarter margin forecasts worried investors
- Apple forecasts 7%–10% revenue growth for the December quarter
Apple stock came under pressure after the company's fiscal fourth-quarter 2026 earnings report on Nov. 2, despite the technology giant beating Wall Street's revenue and profit expectations. Investors focused instead on Apple's disappointing holiday-quarter margin outlook, rising component costs and signs of slowing Services growth.
Shares fell as much as 4.4% during the company's earnings call before recovering some losses in after-hours trading.
Apple Reports Record Revenue and Strong iPhone Sales
Apple reported quarterly revenue of $114.48 billion, which represents a 12% increase from the previous year and exceeded analysts' expectations of approximately $113.39 billion. Earnings per share reached $2.10, beating Wall Street's $1.99 forecast and increasing 14% year over year.
(Source: apple.com)
The company's iPhone business was a major growth driver, and generated $57.58 billion in revenue, up approximately 17% from the previous year. Mac revenue also exceeded expectations at $10.79 billion, while Services revenue reached a record $31.57 billion.
For the full fiscal year, Apple generated approximately $479 billion in revenue, which was another record for the company.
Why Apple Stock Fell Despite Strong Earnings
The negative market reaction was likely due to concerns about profitability heading into Apple's important holiday shopping season. Management forecast gross margins of 45% to 46% for the December quarter, down from 47.9% in the September quarter.
Rising memory-chip prices have become a major challenge as growing demand from artificial intelligence infrastructure providers drives up component costs.
Apple also expects Services revenue to increase by 8% to 9% during the holiday quarter, below analysts' expectations of approximately 10.7% growth. Meanwhile, Greater China revenue reached $17.54 billion, missing Wall Street's forecast of approximately $18.58 billion despite recording year-over-year growth.
Strong iPhone Demand Could Support Apple's Next Quarter
Despite the profitability concerns, Apple expects total revenue to increase between 7% and 10% during the December quarter. Demand for the iPhone 18 Pro is still strong, while Apple's first foldable smartphone, the iPhone Duo, has reportedly experienced supply constraints after its October launch.
The earnings report was also the first under CEO John Ternus, who succeeded Tim Cook in September.
Investors will now watch whether stronger product sales can offset rising manufacturing costs and support profitability during the holiday season.
