Apple reported fiscal fourth-quarter 2026 results after Monday’s close in John Ternus’s first earnings call as CEO since succeeding Tim Cook earlier this year, and the headline numbers were records — but a soft holiday-quarter margin guide sent shares lower anyway.

What Happened

Revenue came in at a record $114.48 billion, up 12% year over year from $102.47 billion and above the $113.46 billion Wall Street consensus, while EPS of $2.10 beat the $2.00 estimate and topped the $1.85 Apple posted a year ago. Within that, iPhone revenue of $57.58 billion beat the Street’s $56.48 billion estimate, Mac revenue of $10.79 billion came in well above the $9.69 billion consensus, and Services revenue of $31.57 billion landed essentially in line with the $31.58 billion estimate. Wearables, Home and Accessories contributed $8.30 billion and iPad $6.23 billion. The notable soft spot was geography: Greater China revenue of $17.54 billion, while up 28% year over year on iPhone and Mac strength, still missed the Street’s $18.75 billion estimate by roughly $1.2 billion. For the full fiscal year, Apple posted an all-time-record $479 billion in revenue, $28 billion in operating cash flow, and returned $28 billion to shareholders, CFO Kevan Parekh said on the call, adding that Apple “delivered September quarter records for net income and EPS.” Ternus, in his first quarter steering the company, pointed to records across the board but also said memory pricing “is unprecedented” right now — a preview of the guidance that rattled investors. For the holiday quarter, Apple guided total revenue growth of 7% to 10% and Services growth of 8% to 9%, but set gross margin at just 45% to 46%, pressured by rising memory costs tied to Apple’s Siri AI buildout, and flagged that Mac and iPad will be supply-constrained due to memory shortages. Shares fell 1.83% to $338.32 during Monday’s regular session ahead of the print, then slid another 2.78% after hours to $328.93 once the guidance landed — a cumulative decline of roughly 4.5% from Friday’s close, as investors weighed the margin squeeze and China shortfall against the headline beat.

Analyst Reaction

Wall Street’s response leaned cautious despite the beat. Morgan Stanley trimmed its price target to $350 from $355 while keeping an Overweight rating, pointing to decelerating Services growth — which Apple attributed to App Store trends, third-party licensing and foreign-exchange headwinds — plus a holiday-quarter gross-margin guide that came in roughly 100 basis points below the firm’s model, largely because about $1 billion of expected tariff refunds failed to materialize; the firm also trimmed its fiscal 2027 EPS estimate by five cents to $9.85. JPMorgan similarly cut its target to $355 from $360, also maintaining Overweight, citing “challenging product and services margin dynamics” even as it raised its fiscal 2027 product-revenue forecasts on hardware-cycle strength. D.A. Davidson’s Gil Luria flagged the December-quarter outlook as a bigger worry than the September print itself, echoing the Street’s broader focus on margin compression over the beat. The matching $5 trims from two of Apple’s largest bulls, both citing the same services-and-margin combination, underscore that the guidance — not the quarter just reported — is driving the post-earnings selloff.

Why It Matters

Apple’s report lands in the middle of one of the year’s busiest earnings weeks, with AMD reporting Tuesday after the close and seven more S&P 100 names due before Friday — see FactSheets’ original AAPL earnings preview and the AMD earnings preview for what’s still ahead this week. The memory-cost pressure Apple flagged echoes a theme running across this earnings season’s hardware makers, and reinforces why FactSheets’ Stock Fact Sheets hub and ongoing Earnings coverage are tracking margin commentary as closely as headline beats. For a deeper look at Apple’s financials, see the AAPL Stock Fact Sheet, and for the broader AI capital-spending backdrop pressuring component costs industry-wide, see FactSheets’ Business coverage.

This article is for informational purposes only and does not constitute investment advice. Analyst estimates and price targets are subject to change; consult a financial advisor before making investment decisions.

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