3 November 2026
If you are covering Apple's latest financial results, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
"John Ternus delivered his first earnings report as Apple CEO, where results were okay if on the disappointing side. Revenues were up 12%, driven primarily by iPhone sales and strong sales of Mac Mini, which users can use to apply Agentic AI. China growth was robust which is pleasing to see, while iPad and wearables disappointed with services growing but lower than the group average at 10%. There appears to be a lot of interest in the iPhone Duo, but it is early days yet with the product not yet on full release, but it is hoped that can help drive the next leg of Apple's product innovation.
"Where investors were left wanting was in the margin. Gross Margins reached 47.9%, but some of this is due to tariff benefits, while memory costs continue to be a significant headwind. Once those tariff benefits roll off, the margin will get hit and as such the guidance is for that to decline. The company also guided for revenues in the next quarter to be 7-10%, while the group is not substantially expanding its capex, despite the desire for Siri to compete as an AI tool.
"All of this leaves Apple in an intriguing position. The current valuation does not scream attractive given the level of revenue and earnings growth on offer. That said, it remains a defensive place to be especially given the recent tech related sell off we have seen. Apple isn't beholden to the fortunes of the AI trade like some of the hyperscalers, and certainly isn't seeing the same pressures on cashflows. This is beneficial in the short-term, but the company needs to ensure that doesn't leave them behind in the long-term."
