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AAPL's Services made up 20.9% of fiscal Q1 2026 net sales, rising 14% y/y to $30.01B.
Apple TV viewership rose 36% YoY; MLS is included, and exclusive U.S. Formula 1 rights start in 2026.
Apple Arcade has 200 games; Nick Jr. Replay arrives May 7 as paid and transacting accounts hit highs.
Apple (AAPL - Free Report) continues to benefit from the strength of its Services segment, supported by growing traction in streaming content and an expanding Apple Arcade gaming portfolio. In the first quarter of fiscal 2026, Services contributed 20.9% of total net sales, with revenues rising 14% year over year to $30.01 billion.
Apple TV+ has been a key growth driver. The platform saw viewership jump 36% year over year in December, fueled by the success of titles like Pluribus. Momentum is expected to continue with a strong upcoming lineup, including Cape Fear from Steven Spielberg and Martin Scorsese, along with the fourth season of Ted Lasso. Apple is also deepening its push into sports content. All Major League Soccer (MLS) matches are now available to Apple TV+ subscribers at no extra cost. Additionally, Apple TV+ has secured exclusive U.S. broadcasting rights for Formula 1 starting in 2026 under a five-year deal. The return of “Friday Night Baseball,” a weekly MLB doubleheader, further strengthens its live sports offering.
On the gaming side, Apple is steadily enhancing Apple Arcade to boost user engagement. The service now offers more than 200 family-friendly games, with recent additions such as DREDGE+, Unpacking+, and My Very Hungry Caterpillar+. Expanding on this momentum, Apple has announced that Nick Jr. Replay will launch on Apple Arcade on May 7, delivering a curated collection of popular kids’ content and interactive experiences, reinforcing Apple’s focus on family-friendly entertainment.
Apple’s installed base — now exceeding 2.5 billion active devices — continues to provide a solid foundation for Services expansion. Customer engagement remains strong, with both transacting and paid accounts hitting all-time highs in the fiscal first quarter. Apple expects second-quarter fiscal 2026 revenues to grow between 13% and 16% year over year. Services revenues are projected to grow at a pace similar to that seen in the first quarter of fiscal 2026. The Zacks Consensus Estimate currently forecasts that Services is pegged at $30.39 billion, implying 14.1% year-over-year growth.
Apple’s Faces Stiff Competition
AAPL is facing stiff competition from the likes of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in domains like streaming and gaming.
Amazon offers Prime Video bundled with its Amazon Prime membership. The service offers both ad-supported and ad-free options. In comparison to Apple TV+, Amazon Prime Video has a much larger content portfolio, including originals. Microsoft’s gaming assets include Xbox and Activision Blizzard, and it is investing heavily in gaming studios and subscriptions.
Apple shares have dropped 0.4% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 9.1%.
Apple Stock’s Price Performance
Image Source: Zacks Investment Research
The AAPL stock is trading at a premium, with a forward 12-month price/earnings of 30.15X compared with the broader sector’s 25.56X. AAPL has a Value Score of F.
AAPL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $8.52 per share, up 1.1% over the past 30 days, suggesting 14.2% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
AAPL's Services Growth Rides on Strong Content & Games: What's Ahead?
Key Takeaways
Apple (AAPL - Free Report) continues to benefit from the strength of its Services segment, supported by growing traction in streaming content and an expanding Apple Arcade gaming portfolio. In the first quarter of fiscal 2026, Services contributed 20.9% of total net sales, with revenues rising 14% year over year to $30.01 billion.
Apple TV+ has been a key growth driver. The platform saw viewership jump 36% year over year in December, fueled by the success of titles like Pluribus. Momentum is expected to continue with a strong upcoming lineup, including Cape Fear from Steven Spielberg and Martin Scorsese, along with the fourth season of Ted Lasso. Apple is also deepening its push into sports content. All Major League Soccer (MLS) matches are now available to Apple TV+ subscribers at no extra cost. Additionally, Apple TV+ has secured exclusive U.S. broadcasting rights for Formula 1 starting in 2026 under a five-year deal. The return of “Friday Night Baseball,” a weekly MLB doubleheader, further strengthens its live sports offering.
On the gaming side, Apple is steadily enhancing Apple Arcade to boost user engagement. The service now offers more than 200 family-friendly games, with recent additions such as DREDGE+, Unpacking+, and My Very Hungry Caterpillar+. Expanding on this momentum, Apple has announced that Nick Jr. Replay will launch on Apple Arcade on May 7, delivering a curated collection of popular kids’ content and interactive experiences, reinforcing Apple’s focus on family-friendly entertainment.
Apple’s installed base — now exceeding 2.5 billion active devices — continues to provide a solid foundation for Services expansion. Customer engagement remains strong, with both transacting and paid accounts hitting all-time highs in the fiscal first quarter. Apple expects second-quarter fiscal 2026 revenues to grow between 13% and 16% year over year. Services revenues are projected to grow at a pace similar to that seen in the first quarter of fiscal 2026. The Zacks Consensus Estimate currently forecasts that Services is pegged at $30.39 billion, implying 14.1% year-over-year growth.
Apple’s Faces Stiff Competition
AAPL is facing stiff competition from the likes of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in domains like streaming and gaming.
Amazon offers Prime Video bundled with its Amazon Prime membership. The service offers both ad-supported and ad-free options. In comparison to Apple TV+, Amazon Prime Video has a much larger content portfolio, including originals. Microsoft’s gaming assets include Xbox and Activision Blizzard, and it is investing heavily in gaming studios and subscriptions.
AAPL’s Share Price Performance, Valuation & Estimates
Apple shares have dropped 0.4% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 9.1%.
Apple Stock’s Price Performance
Image Source: Zacks Investment Research
The AAPL stock is trading at a premium, with a forward 12-month price/earnings of 30.15X compared with the broader sector’s 25.56X. AAPL has a Value Score of F.
AAPL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $8.52 per share, up 1.1% over the past 30 days, suggesting 14.2% year-over-year growth.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.