CHENGDU, CHINA – MARCH 18: Apple CEO Tim Cook attends a special event marking Apple’s 50th anniversary at the Apple Taikoo Li Chengdu store on March 18, 2026 in Chengdu, Sichuan Province of China.
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Apple shares jumped more than 4% on Thursday, headed for the sharpest rally since August, after the iPhone maker reported better-than-expected quarterly results and issued revenue guidance for the current period that sailed past analysts’ estimates.
CEO Tim Cook, who is preparing to step down in September after 15 years at the helm, touted the company’s performance in the face of significant supply constraints due largely to the global memory crunch.
The company said revenue in the fiscal third quarter, which ends in June, will increase between 14% and 17% from a year earlier, while analysts were projecting growth of 9.5%. Apple is seeing continued demand from the iPhone 17 family, which Cook called the “most popular lineup in our history,” as well as for a number of Mac models.
In March, Apple released a lower-cost computer called the MacBook Neo, and Cook said late Wednesday that customer response “has just been off the charts, with higher-than-expected demand.”
Analysts sought clarity from Cook, who said the company would “look at a range of options” to address soaring memory costs, a trend the CEO only sees intensifying. Investors didn’t get a lot of answers, but were mostly unconcerned.
“That does create some risk, but after last night’s results, we feel much better about Apple’s ability to manage margins” than previously expected, wrote analysts at Morgan Stanley, in a note to clients on Friday. “It’s the single-greatest source of our estimates moving higher post-earnings.”
The analysts, who recommend buying the stock, lifted their earnings per share projection for the fiscal year to $8.89 from $8.63.
Prior to the bullish guidance issued on the earnings call, Apple reported a revenue and earnings beat for the fiscal second quarter. Revenue climbed 17% to $111.18 billion from $95.4 billion a year earlier. Analysts were expecting sales of $109.66 billion, according to LSEG.
The company topped estimates for Mac revenue, iPad revenue and services, but came up short on iPhone sales. Apple has continued to generate profit growth as it bolsters its services business, which comes with much higher margins than hardware.
Services revenue in the quarter rose about 16% to $30.98 billion from $26.65 billion a year ago. Apple uses its massive customer base — and a total of over 2.5 billion active devices on the market — to sell subscriptions to entertainment services, as well as to services for Apple Pay, iCloud and AppleCare.
Long stuck in the high 30s, Apple’s gross margin has been steadily moving up in recent years, reaching 49.3% in the latest quarter, up from 48.2% in the previous period. For the June quarter, Apple said its gross margin will be between 47.5% and 48.5%.
KeyBanc analysts, who have the equivalent of a hold rating on the stock, said Apple’s margin forecast is “not showing the expected memory price crunch.”
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