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For the fourth quarter of fiscal 2026, Apple expects revenues to increase 9-11% year over year. Management anticipates foreign exchange to reduce the growth rate by about 2.5 percentage points sequentially, while supply constraints are expected to intensify across iPhone, Mac and iPad. Gross margin is projected between 47% and 48%, including a roughly 1-percentage-point benefit from tariff refunds. Operating expenses are expected between $19.1 billion and $19.4 billion.
The Zacks Consensus Estimate for fiscal fourth-quarter net sales is pegged at $112.95 billion, indicating year-over-year growth of 10.2%.
The consensus mark for earnings is pegged at $1.98 per share, up a couple of cents over the past 30 days. The estimate indicates a 7% increase from the year-ago quarter’s reported figure.
Consensus Estimate Trend
Image Source: Zacks Investment Research
AAPL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the earnings surprise being 5.1%, on average.
Let us see how things have shaped up prior to this announcement.
Factors to Drive Apple’s Fiscal Q4 Results
Apple is expected to have benefited from sustained iPhone demand, the launch of the iPhone 18 Pro lineup, growing adoption of Apple Intelligence and continued expansion in Services in the fourth quarter of fiscal 2026. However, semiconductor supply constraints, rising memory costs and unfavorable foreign exchange movements are likely to have moderated growth.
The iPhone business is likely to have remained Apple’s primary growth driver in the to-be-reported quarter, supported by robust demand for the iPhone 17 family and the introduction of the iPhone 18 Pro and iPhone 18 Pro Max on Sept. 18. The new iPhone 18 Pro models feature the A20 Pro chip, built on advanced 2-nanometer technology, improved AI processing capabilities, upgraded camera systems and longer battery life. The integration of Siri AI and enhanced Apple Intelligence capabilities is likely to have encouraged device upgrades, particularly among premium customers.
However, limited availability of advanced semiconductor components and foreign exchange headwinds are expected to have constrained shipment growth. Apple anticipates iPhone revenues to grow in the mid-teens on a reported basis in the September quarter, below the 22% growth recorded in the June quarter.
Apple’s Services business is likely to have benefited from its expanding installed base, increasing paid subscriptions and growing adoption of digital offerings. The company’s installed base surpassed 2.5 billion active devices, while paid subscriptions exceeded 1.5 billion, providing a strong foundation for recurring revenues. Increasing adoption of iCloud, Apple Pay, Apple TV and other subscription-based offerings is likely to have supported Services performance.
Apple expects the September-quarter Services revenue growth rate to remain broadly consistent with the preceding quarter after adjusting for the approximately 2.5-percentage-point sequential foreign exchange headwind.
Apple shares have appreciated 26.5% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 17.4%. While Apple shares have outperformed HP (HPQ - Free Report) and Alphabet (GOOGL - Free Report) over the time frame, its shares have lagged Dell Technologies (DELL - Free Report) . YTD, shares of HP, Alphabet and Dell have returned 45.7%, 3.8% and 292.3%, respectively.
Apple Stock’s Price Performance
Image Source: Zacks Investment Research
The AAPL stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price/earnings, AAPL is trading at 35.43X, higher than the Zacks Computer & Technology sector’s 19.39X, Dell’s 16.93X, HP’s 10.56X and Alphabet’s 20.32X.
AAPL Stock is Overvalued
Image Source: Zacks Investment Research
AI Focus to Aid AAPL’s Prospects
Apple’s growing focus on AI is expected to be a significant long-term growth catalyst. The company is positioning the iPhone as an intelligent personal hub through deeper integration of Apple Intelligence, Siri AI and Private Cloud Compute. The new Siri AI can understand personal context, retrieve information across applications and perform tasks within third-party apps, potentially strengthening customer engagement and encouraging device upgrades.
The A20 Pro chip’s advanced Neural Engine and improved memory bandwidth enable more sophisticated on-device AI processing. Apple’s emphasis on privacy-focused AI, combined with its integrated hardware and software ecosystem, could strengthen its competitive differentiation and stimulate demand for premium devices over the long term.
Apple’s Services business offers substantial long-term growth opportunities, supported by its installed base of more than 2.5 billion active devices and over 1.5 billion paid subscriptions. Increasing adoption of the App Store, iCloud, Apple Pay, AppleCare, Apple Music and Apple TV is expected to support recurring revenue growth.
Enterprise demand represents an additional opportunity. Enterprises such as Disney are using Mac systems for AI workloads that reduce cloud processing costs and enhance data privacy. Apple’s investments in custom silicon, including the A-series and M-series processors, are expected to strengthen its competitive positioning across smartphones, computers and AI-enabled devices.
Conclusion
Apple’s strong iPhone demand, expanding Services business and growing adoption of Apple Intelligence are expected to support fourth-quarter fiscal 2026 results. The company’s focus on AI-powered devices, custom silicon and recurring Services revenues bodes well for long-term growth. However, rising memory costs, semiconductor supply constraints and unfavorable foreign exchange movements remain near-term headwinds. Moreover, AAPL's stretched valuation limits upside potential despite strong growth prospects. Investors may prefer to wait for a more attractive entry point ahead of the earnings announcement.
View the Zacks #1 Rank List
Image: Bigstock
Apple's Q4 Earnings Loom: Buy or Sell AAPL Stock Ahead of Results?
Key Takeaways
Apple (AAPL - Free Report) is set to report fourth-quarter fiscal 2026 results on Nov. 2.
For the fourth quarter of fiscal 2026, Apple expects revenues to increase 9-11% year over year. Management anticipates foreign exchange to reduce the growth rate by about 2.5 percentage points sequentially, while supply constraints are expected to intensify across iPhone, Mac and iPad. Gross margin is projected between 47% and 48%, including a roughly 1-percentage-point benefit from tariff refunds. Operating expenses are expected between $19.1 billion and $19.4 billion.
The Zacks Consensus Estimate for fiscal fourth-quarter net sales is pegged at $112.95 billion, indicating year-over-year growth of 10.2%.
The consensus mark for earnings is pegged at $1.98 per share, up a couple of cents over the past 30 days. The estimate indicates a 7% increase from the year-ago quarter’s reported figure.
Consensus Estimate Trend
Image Source: Zacks Investment Research
AAPL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the earnings surprise being 5.1%, on average.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Let us see how things have shaped up prior to this announcement.
Factors to Drive Apple’s Fiscal Q4 Results
Apple is expected to have benefited from sustained iPhone demand, the launch of the iPhone 18 Pro lineup, growing adoption of Apple Intelligence and continued expansion in Services in the fourth quarter of fiscal 2026. However, semiconductor supply constraints, rising memory costs and unfavorable foreign exchange movements are likely to have moderated growth.
The iPhone business is likely to have remained Apple’s primary growth driver in the to-be-reported quarter, supported by robust demand for the iPhone 17 family and the introduction of the iPhone 18 Pro and iPhone 18 Pro Max on Sept. 18. The new iPhone 18 Pro models feature the A20 Pro chip, built on advanced 2-nanometer technology, improved AI processing capabilities, upgraded camera systems and longer battery life. The integration of Siri AI and enhanced Apple Intelligence capabilities is likely to have encouraged device upgrades, particularly among premium customers.
However, limited availability of advanced semiconductor components and foreign exchange headwinds are expected to have constrained shipment growth. Apple anticipates iPhone revenues to grow in the mid-teens on a reported basis in the September quarter, below the 22% growth recorded in the June quarter.
Apple’s Services business is likely to have benefited from its expanding installed base, increasing paid subscriptions and growing adoption of digital offerings. The company’s installed base surpassed 2.5 billion active devices, while paid subscriptions exceeded 1.5 billion, providing a strong foundation for recurring revenues. Increasing adoption of iCloud, Apple Pay, Apple TV and other subscription-based offerings is likely to have supported Services performance.
Apple expects the September-quarter Services revenue growth rate to remain broadly consistent with the preceding quarter after adjusting for the approximately 2.5-percentage-point sequential foreign exchange headwind.
AAPL Shares Outperform Sector; Valuation Stretched
Apple shares have appreciated 26.5% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 17.4%. While Apple shares have outperformed HP (HPQ - Free Report) and Alphabet (GOOGL - Free Report) over the time frame, its shares have lagged Dell Technologies (DELL - Free Report) . YTD, shares of HP, Alphabet and Dell have returned 45.7%, 3.8% and 292.3%, respectively.
Apple Stock’s Price Performance
Image Source: Zacks Investment Research
The AAPL stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price/earnings, AAPL is trading at 35.43X, higher than the Zacks Computer & Technology sector’s 19.39X, Dell’s 16.93X, HP’s 10.56X and Alphabet’s 20.32X.
AAPL Stock is Overvalued
Image Source: Zacks Investment Research
AI Focus to Aid AAPL’s Prospects
Apple’s growing focus on AI is expected to be a significant long-term growth catalyst. The company is positioning the iPhone as an intelligent personal hub through deeper integration of Apple Intelligence, Siri AI and Private Cloud Compute. The new Siri AI can understand personal context, retrieve information across applications and perform tasks within third-party apps, potentially strengthening customer engagement and encouraging device upgrades.
The A20 Pro chip’s advanced Neural Engine and improved memory bandwidth enable more sophisticated on-device AI processing. Apple’s emphasis on privacy-focused AI, combined with its integrated hardware and software ecosystem, could strengthen its competitive differentiation and stimulate demand for premium devices over the long term.
Apple’s Services business offers substantial long-term growth opportunities, supported by its installed base of more than 2.5 billion active devices and over 1.5 billion paid subscriptions. Increasing adoption of the App Store, iCloud, Apple Pay, AppleCare, Apple Music and Apple TV is expected to support recurring revenue growth.
Enterprise demand represents an additional opportunity. Enterprises such as Disney are using Mac systems for AI workloads that reduce cloud processing costs and enhance data privacy. Apple’s investments in custom silicon, including the A-series and M-series processors, are expected to strengthen its competitive positioning across smartphones, computers and AI-enabled devices.
Conclusion
Apple’s strong iPhone demand, expanding Services business and growing adoption of Apple Intelligence are expected to support fourth-quarter fiscal 2026 results. The company’s focus on AI-powered devices, custom silicon and recurring Services revenues bodes well for long-term growth. However, rising memory costs, semiconductor supply constraints and unfavorable foreign exchange movements remain near-term headwinds. Moreover, AAPL's stretched valuation limits upside potential despite strong growth prospects. Investors may prefer to wait for a more attractive entry point ahead of the earnings announcement.
Currently, AAPL carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.