Apple stock falls 7% despite record $109.4B June quarter

Apple reported June-quarter revenue of $109.4 billion, up 16% year over year, a record, but shares fell 7% as supply constraints and softer services growth clouded the outlook.

"We set records in every category, with June quarter records in advertising, App Store, AppleCare, Apple Music, and Apple TV+, as well as all-time records in cloud services and payment services," Kevan Parekh, Apple's CFO, said on the earnings call.

Metric	Actual	Consensus	Beat/Miss
Revenue	$109.4B	$108.65B	+0.7%
EPS (adjusted)	$1.91	$1.89	+$0.02
Services revenue	$30.7B	$31.2B	-1.6%

iPhone revenue rose 22% to $54.25 billion, beating the London Stock Exchange Group estimate of $53.86 billion. Mac contributed $10.35 billion, up 29%, versus the $8.74 billion consensus. iPad revenue came in at $6.19 billion, below the $6.92 billion estimate. Diluted EPS reached $2.02, up 29%, though tariff refunds contributed about 2 percentage points of gross margin and $0.11 to EPS.

The stock closed down 7.4% at about $309 as Apple guided September-quarter revenue growth of 9% to 11%, below Wall Street's 12% expectation. Management warned that supply constraints would increase across iPhone, Mac, and iPad, citing limited availability of advanced chipmaking capacity for Apple-designed processors and sharply higher memory prices. Gross margin guidance of 47% to 48% includes an expected benefit of about 1 percentage point from tariff refunds.

The quarter marked Tim Cook's final earnings report as CEO. Cook, who has led Apple for 15 years, steps down September 1 and will become executive chairman. John Ternus, head of hardware engineering, takes over as CEO.

Services remains the key margin driver, with Apple passing 1.5 billion paid subscriptions across more than 2.5 billion active devices. But the 12% services growth was the slowest of Apple's three largest revenue categories, and Greater China revenue of $18.8 billion fell short of the $19.5 billion expected.

At least four brokerages lowered price targets after the report while three raised them, leaving the median target near $330. Apple's valuation model on TIKR estimates a target price of about $360 by September 2028, implying roughly 17% upside from current levels.

The guidance shortfall shows Apple's record demand is colliding with production limits and component inflation. Investors will watch the September-quarter earnings call for updates on supply recovery and whether Siri AI, introduced at WWDC26, drives the next upgrade cycle.

This article is for informational purposes only and does not constitute investment advice.