Apple (NASDAQ: AAPL) delivered one of its strongest quarterly performances in recent memory, yet investors responded by wiping roughly $362 billion from the company’s market capitalization in premarket trading.
Revenue rose 16% from a year earlier to $109.4 billion, while earnings per share climbed 29% to $2.02, comfortably beating the Wall Street consensus of $1.89 per share.
iPhone revenue reached $54.3 billion, up 22% year-over-year, marking a June-quarter record driven by the iPhone 17 family’s historic launch.
Mac revenue increased 29%, and Apple’s Services segment set a record of its own, with every category hitting record revenue as the company surpassed 1.5 billion paid subscriptions for the first time.
Services revenue of $30.74 billion did fall short of the Wall Street forecast of $31.36 billion, though the segment still posted double-digit growth and a double-digit increase in gross dollar profits.
Not all of the headline strength was organic, however, as tariff refunds added 11 cents to earnings per share and contributed roughly two percentage points to Apple’s reported 50.1% gross margin.
CEO Tim Cook warned that supply bottlenecks already hurting Mac availability will worsen and spread to the iPhone and iPad businesses, with pressure from improved CPUs sourced largely from Taiwan Semiconductor Manufacturing Co.
“This is not a regular supply issue, it’s a demand forecast issue, to be candid,” Cook said, adding that “we’ve got a quarter ahead where we’ll be scrambling on the supply side.”
Cook acknowledged the company underestimated demand, particularly for the iPhone and Mac, framing the shortage as a reflection of brand strength rather than a sign of customer retreat.
The dilemma is an unusual one for Apple: demand is running higher than projected, yet the company has a limited ability to boost supply quickly enough to convert that interest into revenue.
Those constraints are expected to intensify through the September quarter across iPhone, Mac, and iPad, putting pressure on what is typically the company’s most important selling period.
The supply bind partly explains Apple’s announcement of a new multi-year custom-silicon and wireless-connectivity agreement with Broadcom exceeding $30 billion, signaling an effort to secure critical components at scale.
Concerns over memory and component constraints have been building for months, as companies like Micron shifted capacity toward AI and data center demand at the expense of consumer devices.
A suspected pull-forward in demand by consumers and businesses ahead of potential shortages and higher prices has also complicated Apple’s near-term supply picture.
Cook built his reputation by transforming Apple’s supply chain into a genuine competitive advantage, making his latest warning a striking acknowledgment that even the world’s most sophisticated hardware operation has its limits.
The central challenge Apple now faces is not finding buyers for its products, but ensuring its hottest sales cycle in company history does not end with empty shelves.
