Apple delivered a strong finish to its fiscal year with record September-quarter results that topped Wall Street estimates, yet shares tumbled as investors focused on a projected margin squeeze from soaring memory costs and a cooling services outlook under new CEO John Ternus.
The company reported fiscal fourth-quarter revenue of $114.5 billion, up 12% from a year earlier and ahead of the roughly $113.4 billion consensus, with diluted earnings per share of $2.10 beating the $1.99 estimate (aided in part by tariff refunds). iPhone revenue hit a September-quarter record of $57.58 billion, up about 17%, even with a staggered launch that included only limited sales of the iPhone 18 Pro models. Services reached an all-time high near $31.6 billion, while Mac sales jumped roughly 24%. iPad and Wearables declined on tough comparisons and supply constraints. Full fiscal 2026 revenue reached a company record of about $479 billion.
Shares, which closed Monday at $338.32, fell as much as roughly 4% in after-hours trading during the earnings call and were down about 4% in Tuesday premarket trading near $325, erasing more than $170 billion in market value from the company’s roughly $4.9 trillion valuation if the losses held.
The sell-off was driven primarily by guidance rather than the beat. Apple projected December-quarter (holiday) revenue growth of 7% to 10% — ahead of expectations and what would be an all-time record period — but guided gross margin to 45%–46%, down from 47.9% in the September quarter and below the roughly 47% analysts anticipated. Services growth was forecast at 8%–9%, short of the roughly 10.7% expected.
On his first earnings call as CEO, Ternus described the memory-pricing environment as “unprecedented,” noting higher costs versus the prior quarter and warning they would rise further into the December period as Apple’s cheaper inventory advantage fades amid competition for components from AI infrastructure demand. Margins also face pressure from the ramp of its AI-powered Siri features.
Analysts noted the results were solid on the hardware side — particularly the resilient iPhone franchise that underpins the ecosystem — but flagged concerns that non-iPhone businesses are not fully pulling their weight, alongside elevated costs and a high valuation (near 35 times forward earnings). Some also pointed to a Greater China miss relative to certain forecasts and broader consumer cost-of-living pressures that could limit Apple’s ability to pass through higher component prices.
The reaction underscores a classic post-earnings dynamic for high-multiple tech names: strong past results can be overshadowed by any sign of near-term profit compression, especially heading into a critical holiday season and amid persistent supply-chain and AI-related spending pressures. Apple continues to emphasize its installed base, pricing power, and product pipeline, including the recent iPhone Duo foldable and other launches, but investors appear focused on whether margin headwinds will prove temporary or more persistent.
MacDailyNews Take: Everybody is dealing wth soaring memory costs and Apple customers are, by far, the best positioned to absorb price increases while Apple is, by far, the company that’s best positioned to absorb component price fluctuations thanks to margins that are the envy of the industry. Apple’s so called “competitors” have no such luxuries. They have only price-sensitive (read: cheap and/or poor) customers and little room to maneuver with low or no margins. Net result: As Apple customers keep buying while rivals’ customers balk, Apple gains market share in every market in which they participate.
Patience, AAPL padawans. This too shall pass. Profit from the laughably overwrought panic of others.
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Big takeaway is the decline in services revenue. This most likely means Apple jacking prices once again.
…Same as it ever was… Stock always does this – Apple never gets rewarded for great performance.. thing is all other companies are in the same boat on RAM prices but Apple is in a much better position than all other companies.
Nothing about this quick excuse to sell off changes any of Apple’s fundamentals. Apple maintains its hedge against massively unprofitable AI. It is a cash cow. The iPhone is stronger than ever.
That’s mostly all investors want to know about.