1 August 2025
If you are covering Apple’s Q3 results please find comments below from Ben Barringer, global technology analyst at Quilter Cheviot:
“Apple delivered a reasonable set of Q3 results, beating expectations by a couple of percent and posting a 10% rise in revenues. However, some of that growth was driven by a ‘pull forward’ effect, with around 1% attributed to consumers accelerating purchases amid rumours of incoming tariffs.
“While the overall performance was solid, there were a few headwinds that muted the impact, particularly in China, which showed further signs of weakness. On the positive side, Apple’s services division continues to perform well, growing 13% year-on-year and reinforcing its importance as a key driver of future growth.
“One of the more interesting developments in this quarter’s results is Apple’s stance on capital expenditure. Compared to its peers – Microsoft, Amazon, and Google – Apple’s investment has been modest, with just $10 billion spent historically versus $130 billion, $120 billion, and $85 billion respectively. However, Apple has now signalled a substantial increase in CapEx for the year ahead. While it’s unlikely to match the scale of its competitors, a doubling of spend would be a meaningful shift and a sign that Apple is preparing to invest more aggressively in its future capabilities.
“Apple also hasn’t ruled out further mergers and acquisitions to accelerate its progress in AI, which is a welcome move given its current lag in the space. That said, we remain neutral on the stock due to a number of ongoing concerns. The market is still waiting for clarity on the Section 232 announcement regarding semiconductors and consumer electronics, which could pose risks to Apple given its exposure. In early August, we expect to see the Department of Justice’s remedies on Google, which could threaten the $20 billion Apple receives annually for making Google the default search engine on iOS. The App Store also faces pressure from the Epic Games litigation, which could result in lower fees and reduced high margin revenue. Meanwhile, Apple’s AI strategy remains rocky, with delays on its AI-enabled iPhone, and overall smartphone growth continues to be sluggish.”
