Overview
- Apple reported a stronger-than-expected fiscal third quarter on July 30 with $109.4 billion in revenue and record EPS driven by outsized iPhone sales.
- Management guided fourth-quarter gross margin down to 47%–48% and said it expects to pay more for DRAM and NAND, signaling supply-driven cost pressure.
- Services revenue grew about 12%, the slowest pace among Apple’s largest segments and below some Street expectations, reducing the high-margin cushion against hardware cost shocks.
- Investors reacted sharply to the guidance, sending shares down as much as about 10%, and Beijing-based Chinese Renaissance downgraded Apple to Hold with an August 6 price-target cut citing muted services growth and elevated memory costs.
- Analysts warn the memory-price and advanced-node capacity squeeze could persist into 2027, which would keep margins under pressure and make future valuation gains dependent on either easing chip costs or a rebound in services growth.