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Apple (AAPL - Free Report) reported fiscal first-quarter results that exceeded Wall Street expectations, driven by a sharp rebound in iPhone demand. Its earnings of $2.84 per share topped the Zacks Consensus Estimate of $2.65 per share and the year-ago level of $2.40 per share.
Revenues jumped 16% year over year to $143.76 billion, comfortably beating the Zacks Consensus estimate by 4.32%. Apple posted a gross margin of 48.2%, topping consensus estimates of 47.5%, per CNBC.
Apple’s active installed base rose to 2.5 billion devices, up from 2.35 billion recorded last January. Shares slipped about 0.4% overnight on Jan. 29, 2026, following the announcement.
Segment Performance
Apple’s performance across business segments was mixed but broadly supportive of its strong headline results. iPhone revenue surged 23% year over year to $85.27 billion, easily beating expectations and reflecting strong demand for the iPhone 17 lineup, as quoted on CNBC.
The iPad business delivered solid growth, with revenue rising 6% to $8.60 billion and surpassing forecasts, helped by strong demand from first-time buyers.
Mac revenue fell 7% annually to $8.39 billion, missing estimates despite the launch of updated MacBook Pro models powered by the M4 chip. Sales dropped 7% on an annual basis, per CNBC.
Sales in the Wearables, Home and Accessories segment declined 2% year over year to $11.49 billion, coming in below Wall Street estimates.
Meanwhile, Services revenue grew 14% to $30.01 billion, roughly in line with expectations, thanks to growth in subscriptions, advertising, and other ecosystem-related offerings.
For the current quarter, Apple expects revenue growth of 13% to 16% year over year, implying sales between $107.8 billion and $110.66 billion — well above the Zacks Consensus Estimate of $102.89 billion. Management cautioned, however, that iPhone supply will remain constrained.
China & India Drive Upside Surprise
Apple delivered standout results in Greater China, including Taiwan and Hong Kong, where revenue surged 38% to $25.53 billion. It was the best iPhone quarter in history in greater China, as quoted on The Guardian.
In India, too, Apple posted an all-time revenue record with a strong double-digit growth.India is the second-largest smartphone market in the world and the fourth-largest PC market, as quoted on Deccan Herald.
AI Strategy and Investment
Apple recently announced a partnership with Google to integrate the Gemini AI model into Apple Intelligence. While Apple’s AI spending trails peers like Microsoft and Meta, management emphasized confidence in its platforms. The Siri upgrade marks Apple's most significant bet on AI in recent times (read: Siri to Get Smarter With Gemini: The ETF Playbook for Investors).
Capital expenditures declined to $2.37 billion (down from $2.94 in the year-ago quarter), but R&D spending rose sharply to $10.89 billion (from $8.27 billion), reflecting increased investment in future technologies.
Supply Chain Pressures
Apple acknowledged ongoing supply constraints, particularly in advanced chip manufacturing using TSMC’s 3-nanometer process. While rising memory prices had minimal impact in the December quarter, the company expects a greater effect in the current period.
iPhone is Apple’s cash cow, but the long-term viability of its premium pricing is under question if AI gets embedded faster into smartphone capabilities of other brands. Apple’s visible lag in the AI arena in the Mag-7 group is still present. However, its legacy product, the iPhone, should help weather any lag emerging from AI weakness.
Meanwhile, growth in the Indian market could be a plus in the days to come.With the modest presence Apple still has in India, the opportunity for growth is huge. It is widely rumored that Apple is planning to debut its first folding phone sometime in 2026, per The Guradian, which is another plus.
One concern may trouble investors in the months to come – rising costs due to memory chip crunch and the related higher prices.
ETFs in Focus
In a nutshell, Apple’s path ahead shows a mix of possibilities and perils. Investors who do not have a strong stomach for risks may play Apple-heavy exchange-traded funds (ETFs) like Global X PureCap MSCI Information Technology ETF (GXPT - Free Report) , iShares Global Tech ETF (IXN - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) and iShares U.S. Technology ETF (IYW - Free Report) . The basket approach minimizes the company-specific concentration risks.
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Should You Bet on Apple's iPhone-Driven Q1 Earnings? ETFs in Focus
Key Takeaways
Apple (AAPL - Free Report) reported fiscal first-quarter results that exceeded Wall Street expectations, driven by a sharp rebound in iPhone demand. Its earnings of $2.84 per share topped the Zacks Consensus Estimate of $2.65 per share and the year-ago level of $2.40 per share.
Revenues jumped 16% year over year to $143.76 billion, comfortably beating the Zacks Consensus estimate by 4.32%. Apple posted a gross margin of 48.2%, topping consensus estimates of 47.5%, per CNBC.
Apple’s active installed base rose to 2.5 billion devices, up from 2.35 billion recorded last January. Shares slipped about 0.4% overnight on Jan. 29, 2026, following the announcement.
Segment Performance
Apple’s performance across business segments was mixed but broadly supportive of its strong headline results. iPhone revenue surged 23% year over year to $85.27 billion, easily beating expectations and reflecting strong demand for the iPhone 17 lineup, as quoted on CNBC.
The iPad business delivered solid growth, with revenue rising 6% to $8.60 billion and surpassing forecasts, helped by strong demand from first-time buyers.
Mac revenue fell 7% annually to $8.39 billion, missing estimates despite the launch of updated MacBook Pro models powered by the M4 chip. Sales dropped 7% on an annual basis, per CNBC.
Sales in the Wearables, Home and Accessories segment declined 2% year over year to $11.49 billion, coming in below Wall Street estimates.
Meanwhile, Services revenue grew 14% to $30.01 billion, roughly in line with expectations, thanks to growth in subscriptions, advertising, and other ecosystem-related offerings.
Outlook: Sales Growth Despite iPhone Supply Pressure
For the current quarter, Apple expects revenue growth of 13% to 16% year over year, implying sales between $107.8 billion and $110.66 billion — well above the Zacks Consensus Estimate of $102.89 billion. Management cautioned, however, that iPhone supply will remain constrained.
China & India Drive Upside Surprise
Apple delivered standout results in Greater China, including Taiwan and Hong Kong, where revenue surged 38% to $25.53 billion. It was the best iPhone quarter in history in greater China, as quoted on The Guardian.
In India, too, Apple posted an all-time revenue record with a strong double-digit growth.India is the second-largest smartphone market in the world and the fourth-largest PC market, as quoted on Deccan Herald.
AI Strategy and Investment
Apple recently announced a partnership with Google to integrate the Gemini AI model into Apple Intelligence. While Apple’s AI spending trails peers like Microsoft and Meta, management emphasized confidence in its platforms. The Siri upgrade marks Apple's most significant bet on AI in recent times (read: Siri to Get Smarter With Gemini: The ETF Playbook for Investors).
Capital expenditures declined to $2.37 billion (down from $2.94 in the year-ago quarter), but R&D spending rose sharply to $10.89 billion (from $8.27 billion), reflecting increased investment in future technologies.
Supply Chain Pressures
Apple acknowledged ongoing supply constraints, particularly in advanced chip manufacturing using TSMC’s 3-nanometer process. While rising memory prices had minimal impact in the December quarter, the company expects a greater effect in the current period.
Management said it is evaluating options to manage higher component costs amid an AI-driven global memory shortage (read: Tap the Super-Hot Memory Market With These ETFs).
Pros & Cons
iPhone is Apple’s cash cow, but the long-term viability of its premium pricing is under question if AI gets embedded faster into smartphone capabilities of other brands. Apple’s visible lag in the AI arena in the Mag-7 group is still present. However, its legacy product, the iPhone, should help weather any lag emerging from AI weakness.
Meanwhile, growth in the Indian market could be a plus in the days to come.With the modest presence Apple still has in India, the opportunity for growth is huge. It is widely rumored that Apple is planning to debut its first folding phone sometime in 2026, per The Guradian, which is another plus.
One concern may trouble investors in the months to come – rising costs due to memory chip crunch and the related higher prices.
ETFs in Focus
In a nutshell, Apple’s path ahead shows a mix of possibilities and perils. Investors who do not have a strong stomach for risks may play Apple-heavy exchange-traded funds (ETFs) like Global X PureCap MSCI Information Technology ETF (GXPT - Free Report) , iShares Global Tech ETF (IXN - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) and iShares U.S. Technology ETF (IYW - Free Report) . The basket approach minimizes the company-specific concentration risks.