Apple’s first quarter earnings will focus on iPhone sales, AI outlook

Apple (AAPL) CEO Tim Cook and institution volition instrumentality halfway signifier connected Thursday erstwhile the institution reports its archetypal 4th net results. The Street is looking for a beardown showing connected the spot of Apple’s iPhone 17 income and Services segment.

During Apple’s 4th fourth net call, Cook said the institution anticipates archetypal 4th gross to beryllium the “best-ever for the institution and the champion ever for iPhone.” That’s acceptable immoderate large expectations for the company’s results.

But there’s much going connected successful Apple World than iPhone sales. The company, similar galore successful the tech industry, is contending with a worldwide representation shortage caused by the planetary AI information halfway buildout, which is driving up prices connected the cardinal components.

That could enactment unit connected Apple’s margins oregon unit the institution to rise iPhone prices successful the coming months.

There’s besides the substance of Apple’s latest AI moves. Earlier this month, the institution and Google (GOOG, GOOGL) issued a associated connection saying that Apple volition usage Google’s Gemini models and unreality exertion to powerfulness its AI efforts, including a much personalized Siri owed retired aboriginal this year.

According to Bloomberg’s Mark Gurman, though, determination volition really beryllium 2 updates to Siri. The archetypal volition see features Apple primitively showed disconnected astatine its WWDC 2024 event, portion the 2nd volition diagnostic a caller chatbot-like interface meant to spell toe-to-toe with the likes of OpenAI’s ChatGPT.

For the quarter, Apple is expected to study net per stock (EPS) of $2.68 connected gross of $138.4 billion, according to a Bloomberg expert statement estimate. That’s an betterment from the $2.40 and $124.3 cardinal the institution saw successful Q1 past year.

Importantly, iPhone gross is anticipated to travel successful astatine $78.3 billion, up 13% from the $69.1 cardinal the conception generated successful the archetypal fiscal 4th of 2025. Services gross is estimated to apical $30 billion, up 14%.

Revenue retired of China, a anemic spot for the institution successful 2025, is expected to leap astir 18% year-over-year.

Apple is riding precocious connected the backmost of its iPhone 17 enactment of products, Bernstein expert Mark C. Newman wrote successful a enactment to investors Tuesday.

“Strong iPhone income continued into December with [calendar Q4 2025 and Q1 2026] sell-through gross up 12% [year-over-year],” helium said.

According to Newman, Apple’s December planetary income climbed 7% year-over-year, with show “driven by the iPhone 17 bid alongside dependable contributions from the iPhone 16.”

Some of the growth, Newman explained, is simply a effect of customers who purchased caller phones during COVID, upgrading to Apple’s latest iPhones six years later, coupled with the instauration of the iPhone 17’s updated styling.