iPhone sales lead Apple revenue upward as John Ternus takes reins
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The new touchscreen MacBook Pro is displayed at an Apple event in October. Photo: Mario Tama/Getty Images
Apple delivered higher revenue than expected in its most recent quarter as the tech giant rides an uptick in iPhone sales.
Why it matters: Apple recently reclaimed its title as the world's most valuable company — topping Nvidia with its stock up about 25% in 2026 — as its cautious approach to AI spending grows on investors.
- "Once criticized for its lack of AI spending, Apple is now being rewarded for its restraint," writes Jay Woods, chief market strategist of Freedom Capital Markets.
Driving the news: Apple posted revenue of $114.5 billion, up 11.7% compared to a year earlier.
- That topped S&P Capital IQ consensus expectations of $113.4 billion.
- The company also recorded an 11.8% increase in net income to $30.7 billion, topping expectations of $29 billion
Zoom in: The earnings report marks the first for John Ternus in his new role as CEO after he took the reins from Tim Cook, who is now executive chair.
- Apple has not engaged in the AI spending binge that has defined many of the tech industry's biggest players — a decision that appears to be bolstering the stock while many of its contemporaries see their shares sliding.
- Still, investors are awaiting clues on how Ternus will guide Apple's AI strategy moving forward for fear of the company falling behind.
- "Ternus hasn't said much over the past two months beyond not wanting to do AI for the sake of AI," tech analyst Gene Munster wrote on X. "What investors want to hear tonight is that Apple sees an opportunity to be at the center of personalized agents, not just deliver a better Siri."
By the numbers: The company sold 57.58 million iPhones and 10.79 million Macs in the period, up 17.5% and 23.7%, respectively, from a year earlier.
- Apple's record sales in the July-to-September period included about a week's worth of the new iPhone 18 sales, which came with a price increase of $100 or more.
- The company also recently began sales of its new foldable iPhone Duo but is facing supply constraints on that device. Ternus told CNBC he is "not able to predict when supply and demand will be in balance."
- Sales in Apple's services business, which helped sustain its valuation in recent years under Cook's leadership, rose by almost 10%.
In China, one of the most important sales regions for the company, Apple saw a sharp increase in revenue relative to somewhat tepid gains in recent years. Revenue from "Greater China" rose by more than 20% to $17.5 billion.
- Apple is set to launch its "Apple Intelligence" AI features in China in December after waiting years to make technical improvements and win regulatory approval in the country.
The impact: Apple fell slightly in after-hours trading.
- "There's nothing broken in this quarter, but there wasn't enough here to move the story forward either," writes Jake Behan, head of capital markets at Direxion. "Apple delivered the records traders expected but the stock's reaction says the recent move higher was already doing a lot of the work."
What to watch: The company has dealt with skyrocketing costs of certain memory-related components in its devices that are in high demand for AI computing, so much so that executives have expressed concerns about meeting supply.
