Apple shares fell about 6% in after-hours trading despite the company reporting stronger-than-expected fiscal third-quarter results, as investors focused on management’s weaker-than-anticipated revenue outlook for the current quarter. While Apple delivered record June-quarter iPhone sales and exceeded Wall Street’s expectations on revenue and earnings, executives warned that persistent supply constraints, foreign exchange headwinds, and higher memory costs would weigh on growth in the September quarter.
For the quarter ended June 27, Apple reported revenue of $109.42 billion, up 16.4% year over year, while diluted earnings per share rose to $2.02, both comfortably ahead of analyst estimates. However, the company forecast 9%–11% revenue growth for the current quarter, below Wall Street’s expectations of roughly 12%, triggering a sharp sell-off in the stock.
Apple Delivers Strong Quarterly Results
Apple posted one of its strongest June quarters, driven by robust demand for iPhones and Macs.
Q3 FY2026 Financial Highlights
| Metric | Reported | Year-over-Year Change |
|---|---|---|
| Revenue | $109.42 billion | +16.4% |
| Earnings Per Share | $2.02 | Beat estimates |
| iPhone Revenue | $54.25 billion | +21.7% |
| Mac Revenue | $10.35 billion | +28.7% |
| Services Revenue | $30.74 billion | +12.1% |
| iPad Revenue | $6.2 billion | -5.9% |
The iPhone business delivered a record June-quarter performance, while Mac sales surged as demand for Apple’s latest computers remained strong. However, Services revenue, despite growing at a double-digit pace, fell slightly short of analyst expectations, and iPad sales declined from a year earlier.
Why Apple Stock Dropped
Despite the earnings beat, investors reacted negatively to management’s guidance for the current quarter.
Apple cited several challenges expected to affect near-term performance:
- Ongoing supply constraints for advanced semiconductor components.
- Foreign exchange headwinds.
- Higher memory component costs.
- Revenue growth guidance below market expectations.
CEO Tim Cook said demand for Apple’s products continues to exceed the availability of certain advanced chips, limiting the company’s ability to fully meet customer demand.
Factors Behind the Sell-Off
| Positive Developments | Investor Concerns |
|---|---|
| Revenue beat expectations | Slower-than-expected Q4 growth forecast |
| Record iPhone sales | Supply chain constraints |
| Strong Mac performance | Higher memory costs |
| Double-digit revenue growth | Foreign exchange pressures |
| Healthy profitability | Services growth missed estimates |
Supply Chain Challenges Continue
Apple indicated that shortages of advanced chip manufacturing capacity remain a key constraint.
According to management:
- Supply limitations continue to affect production.
- AI-related semiconductor demand has intensified competition for advanced chip capacity.
- Some product shipments may remain constrained during the current quarter.
Although Apple continues to invest in securing component supply, management acknowledged that demand currently exceeds available production capacity for certain critical chips.
Services Business Faces Pressure
Apple’s Services division continued to expand but underperformed analyst expectations.
The company attributed slower-than-expected growth to:
- Softer App Store performance.
- Regulatory changes affecting parts of its digital ecosystem.
- Continued normalization in mobile gaming spending.
Even so, Services remains Apple’s second-largest business and an important contributor to recurring revenue and profitability.
China Remains Mixed
Revenue from Greater China increased compared with the previous year, reflecting improving demand.
However:
- Regional revenue still came in below analyst forecasts.
- Competition from domestic smartphone brands remains intense.
- Apple continues to focus on expanding its AI capabilities and premium product offerings in the Chinese market.
What Investors Will Watch Next
Investors are expected to closely monitor several factors over the coming quarters:
- Resolution of semiconductor supply constraints.
- Launch of the next-generation iPhone lineup.
- Adoption of Apple’s expanding AI features.
- Growth in the high-margin Services business.
- Demand trends in China and other international markets.
The company’s ability to navigate supply limitations while sustaining strong consumer demand will be a key determinant of future stock performance.
Looking Ahead
Apple’s latest quarterly results demonstrated that demand for its products remains resilient, with record June-quarter iPhone sales and stronger-than-expected revenue and earnings highlighting the company’s ability to execute in a challenging environment. However, the market’s reaction underscored investors’ growing focus on future growth rather than past performance. Concerns over semiconductor supply shortages, foreign exchange pressures, and rising component costs overshadowed the earnings beat, leading to a sharp decline in the stock after management issued a more cautious outlook for the September quarter.
Looking ahead, Apple’s performance will depend on how quickly supply chain constraints ease and whether it can maintain strong demand for its premium devices while expanding its AI capabilities and services ecosystem. If component availability improves and upcoming product launches gain traction, Apple could return to stronger revenue momentum, but investors are likely to remain focused on execution against its guidance and the broader competitive landscape in AI-enabled consumer technology.
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