Instant Reaction: Apple Shares Gain as Sales Top Estimates

0:00As a top-performing advisor, you demand top-performing funds. That's why Fidelity's 1 ,000 experienced research professionals combine deep insights and advanced analytics to deliver consistent outcomes for clients across market cycles. Explore 300-plus Morningstar rated 4 - and 5-star funds at i.fidelity.com slash top funds. Across all fund share classes of Fidelity, Fidelity Advisor Shares, and Fidelity ETFs as of 6-15-2026, past performance is no guarantee of future results. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand.

0:38But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. When you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire Reserve for Business is a pay-in-full card that elevates your travel experience and offers premium benefits that will take your business to the next level. Sapphire Reserve for Business offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more.

1:25Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank N.A., member FDIC. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

2:03With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios. Podcasts. Radio. News. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3 ,000 journalists and analysts around the world. Apple shares actually moving into the green, Carol. They are. Just ever so slightly, three, four tenths of one percent. I don't see a new headline, but yeah, investors coming in, it's stuck up about 0.2, 0.3 % here. Okay, well, there were some beats and there were some misses.

2:50Let's start with the misses. Fourth quarter, Greater China Revenue, a big, big miss there. $14.49 billion. The estimate was for$16.43 billion. Overall revenue, though, coming in above$100 billion. That for the first time ever for the September quarter. Greater China Revenue, 12 % below consensus estimate. Services came in with a nice beat. Another miss, surprisingly, the iPhone,$49.03 billion versus$49.3 billion. Yeah, Mark Gurman saying operating expenses, which everyone is now closely watching thanks to Meta, came in line with expectations of$15.91 billion. I'm sure we will hear more about AI investing on the call.

3:29That's coming from our Mark Gurman, who covers Apple so closely and looks at consumer tech overall. Let's get to it with Jay Goldberg. He's senior analyst, semiconductors and electronics at Seaport Research Partners. He's got a buy on Apple. joining us from San Francisco. Take it away. Apple, what do you think? Yeah, it looks OK. It's not perfect. It's not totally clean, but it's got some good stuff. It's got some, you know, OK stuff. Yeah, go ahead, Carol. Well, what's good? What's OK? I mean, just going against my numbers, it looks like services is much stronger than I expected. iPhone was good.

4:08iPad was surprisingly good. I don't know if anyone tracks that anymore, but iPad was good. And gross margins were better than expected. I've been a little cautious about gross margins in consumer companies lately because memory prices are going up. But I don't see that in Apple's numbers. The China stuff, you pointed that out. I think that's concerning, not entirely surprising. It's not surprising, but it's 12 % below consensus. So it surprised some people.

4:37Yeah. Yeah, I mean, just given the state of the world, I think expecting too much from an American company selling it in China right now is going to always disappoint. But, you know, hopefully we have a trade deal and that all goes away. It's a trade truce, I think, is the way that we heard about it today. Trade truce. Is a trade truce enough for that to go away? I think so. I think more practically what was going on in China is the iPhone Air is not available there. It's hard to get here. Production hasn't fully ramped yet. And I think that's going to be the real hit. Right. And this is Apple.

5:10They know how to get their supply chain in time for the year end holiday shopping season. And I don't think I've had I don't think the iPhone air is readily available in China. So I think that will that will help. And so if you're a Chinese consumer, you're looking at it, you see the iPhone air coming. You're going to hold off your iPhone purchases now and wait for that. All right. Shares of Apple now up about one percent here in the aftermarket. So bouncing around, no doubt about it. Mark Gurman on our live blog, who covers Apple and often is breaking exclusives on the company, noting that while China is harsh, they are likely pleased.

5:42Investors, they are likely pleased with the overall revenue growth of 8%, the giant services number. That's something Jay just pointed out. And the 6 % year-over-year iPhone growth, overall a solid quarter. So top of mind for you, what is it that you would, what do you want to know more from when it comes to Apple here, Jay? I think I'm willing to wait on the AI story. I know your previous guest was talking about that, and he's absolutely right. The AI story is important for Apple, but I don't think it's important today. I can wait six months, nine months, a year for them to sort it out. Remember when Apple Maps launched, whatever, 10 years ago?

6:17It was terrible. It was a joke. Now I use Apple Maps more than I use Google Maps. It's gotten better. Sometimes Apple just takes a while to get there. So I'm okay waiting with it. They need to solve it. That's really important, but they don't need to solve it this quarter. I would like to just hear them talk about the supply chain and what's going on in China and what's driving, what are the dynamics in the iPhone business? I think that's the most important. Is there a compelling reason for people to upgrade to 17, to the iPhone 17? I think the Air is pretty intriguing. I'm on the fence. I usually upgrade every year.

6:52I think I'm going to hold out though, because I'm pretty sure they're going to have a foldable phone next year. So that'll be exciting. But I think that everyone I talk to has the air is just raves about it. Like they're enthusiastic about this iPhone in a way that I haven't heard people be enthusiastic about an iPhone in many years. Just to rehash, we've got now shares of Apple up about 1.8 % here in the aftermarket. So this is despite those disappointing sales in China, which did fall short of analyst estimates, but strong overall sales in the period. Hey, let's go to our L.A. Bureau for a moment.

7:25We're going to come back to Jay Goldberg in just a minute or two. Mark Gurman is Bloomberg News Managing Editor for Global Consumer Technology. He is out there in our L.A. Bureau. Mark, fascinating in a short period of time, 12 minutes to see the stock being sold off a little bit to now rallying almost 2 percent. Walk us through this quarter. What stands out here? Yeah, what stands out here is iPhone obviously grew tremendously, 6 % year over year. They beat in nearly every product category, except the iPad had an extremely slight miss on Wall Street forecasts. And again, those are just forecast numbers that get made up anyways.

8:04So I don't think too big of a deal there. The big one, though, is a big decline and miss in greater China. I think some of that can be attributed to the iPhone Air delay, which was not expected When they originally announced the iPhone Air, they anticipated a September release alongside the other models. That model has been doing decently in China since it was released just about a week ago now. The other thing to point out is the seesaw you saw. Originally, the stock dipped on the China development, and maybe iPhone sales weren't as strong as some had anticipated. but Tim Cook told news outlets that got pre-briefed on the Apple earnings results earlier today that the December quarter would grow 10 to 12 percent on an annual basis, which is obviously a fantastic jump for them.

8:55That is a year-over-year growth in the holiday period we have not seen for a very long time, and Apple hasn't provided guidance in a very long time because of COVID and everything that's happened since then. So it's pretty significant. Yeah, shares up 2.9 % as we speak right now. Mark, just one more question for you, and then I know you got to run. On China and the big miss on China, you said it's not too surprising, yet still came in 12 % below consensus estimates. I'm not going to say Apple should throw in the towel in China, but how vulnerable is Apple in China? They're certainly vulnerable in China, but they have obviously a big retail portfolio there of about 50 stores.

9:36As I've said multiple times, they need to start launching products that are specific to the Chinese market. They still don't have their AI strategy together in China. And so we'll see once AI is implemented and iPhones in China next year, if that begins helping turn some things around. And we'll see, you know, we're going to have some pent up demand in China now for the current quarter, the first quarter of the holiday period, because the iPhone air didn't go on sale in September during the September period. All right, Mark, we know you've got to run over to the TV side. So appreciate you jumping on with us.

10:10Mark Gurman, he's Bloomberg News Managing Editor for Global Consumer Tech, really, as we remind everybody, our go-to on Apple, breaking all these exclusive. And right now, the stock is trending higher now, up about 3.5 percent. I will point out that Mark mentioned some news that the chief financial officer had shared with some various media outlets. I'm just looking at the Financial Times. And again, just going back to that, Apple gave a bullish outlook for its crucial holiday sales period, reported record annual profit. Today, the CFO, Kevin Parick, saying Apple expects total company revenue to grow 10 to 12 % year over year in the three months to December with iPhone revenue growing double digits.

10:57So And that is probably why we are seeing Apple shares do that turnaround now up almost 4 % in the aftermarket. Yeah, pretty remarkable to see the turnaround. But, you know, that's what happens. And you get more detail from executives. The call hasn't even started yet. So we'll wait for the call also to start. And maybe we'll see some more movement there, too. Just to repeat, fourth quarter iPad revenue coming in ever so slightly below estimates at$6.95 billion. Products revenue coming in above estimates. Greater China revenue, a big miss there. $14.49 billion, 12 % below consensus estimates of$16.43 billion.

11:31Fourth quarter earnings per share coming in above estimates at$1.85. Mac revenue beating at$8.73 billion. Fourth quarter services revenue also beat their$28.75 billion. Quite a turnaround in the aftermarket trade.

11:52When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at the Hartford.com slash risk mitigation.

12:27Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

13:03These days, it seems like AI agents are just about everywhere you turn. Every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agent's identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent. Secure any agent. Okta secures AI. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it.

13:40That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com.