Apple surpasses Q1 expectations as iPhone sales hit record high
Apple exceeded Wall Street expectations for both revenue and earnings in the first quarter, driven by record iPhone sales, sending AAPL shares up 1%.
On Thursday, Apple reported its first-quarter results. According to the company, iPhone revenue reached a record $85.3 billion, well above analysts’ forecasts of $78.3 billion. In the same quarter a year earlier, iPhone sales totaled $69.1 billion.
Overall, Apple posted earnings per share (EPS) of $2.84 on revenue of $143.8 billion. Bloomberg consensus estimates had projected EPS of $2.68 on revenue of $138.4 billion.
According to Yahoo Finance, Apple’s Services business — its second-largest segment after iPhone — generated $30 billion in revenue, in line with expectations. Revenue from Mac and iPad sales amounted to $8.4 billion and $8.6 billion, respectively, while wearables revenue reached $11.5 billion.
A particularly encouraging sign was the rebound in China, where quarterly sales rose to $25.5 billion, nearly 38% higher than a year earlier. This marked a significant turnaround for the region after sales declines in three of the past four quarters.
Confronting the AI challenge
During the earnings call, however, CEO Tim Cook acknowledged ongoing challenges, noting that a global memory chip shortage could weigh on the company’s margins going forward.
The rapid expansion of AI data centers has put significant pressure on the memory chip market, potentially driving up prices for smartphones, laptops, and other consumer and enterprise devices unless manufacturers absorb the additional costs.
Apple expects gross margins of 48% to 49% in the second quarter, compared with 48% in the first quarter. Against this mixed backdrop, Apple shares still rose nearly 1%.
AAPL Hourly Chart. Source: TradingView
Earlier, Apple announced the acquisition of startup Q.AI in a deal reportedly worth $2 billion, according to The Information. Q.AI’s technology can detect micro-movements of facial skin, which could help Apple enable “non-verbal communication” with AI assistants.
Earlier this month, Apple and Google also released a joint statement confirming that the iPhone maker will use Google’s Gemini models and cloud technologies to advance its AI initiatives, including a more personalized version of Siri expected later this year.
As we wrote, Apple weekly analysis: holds buffer above support at $235.73 as consolidation likely
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