"Last quarter, Apple posted revenue of $102.47 billion, up 7.9% year-over-year, with earnings per share of $1.85 that beat estimates by 5.1%. The company has now beaten consensus estimates in each of the past four quarters, with surprise margins ranging from 1.85% to 9.79%. That consistency matters because investors have learned to expect outperformance. Since that October report, the stock climbed to $288 before retreating to current levels near $256."
"Second, gross margins. Memory shortages are driving up component costs, and the iPhone 17's bill of materials is reportedly higher than prior models. Aletheia Capital flagged this risk explicitly, cutting their price target to $205 on margin compression concerns. The key question is whether Apple's pricing power can offset these headwinds or if margins compress as feared. Third, Services growth. This segment has been Apple's margin expansion engine, but Jefferies warned of a "significant slowdown in App Store revenue growth.""
Apple faces a key test with fiscal Q1 2026 results as investors expect continued outperformance following consecutive beats. The company reported $102.47 billion revenue and $1.85 EPS last quarter, beating estimates and delivering four straight surprise beats. The stock climbed to $288 after the October report but has pulled back to about $256 amid mega-cap rotation. Market odds show a 94.5% probability of a beat. Analysts will focus on iPhone revenue and unit trends, gross margin pressure from higher component costs and memory shortages, and Services growth amid App Store slowdown concerns.
Read at 24/7 Wall St.
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