Key Takeaways

• Record-breaking quarter: Apple posted all-time records for total revenue and EPS, with iPhone sales surging more than 20% for a second straight quarter.
• Massive buyback: The company authorized an additional $100 billion share repurchase program.
• Mixed stock reaction: Shares initially ticked higher after hours but reversed to close 0.7% lower.
• iPhone juggernaut: iPhone revenue jumped 21.7% year-on-year to $56.99 billion, following Q1’s 23.3% surge — the strongest since Q4 2021.
• Q2 numbers crush estimates: EPS of $2.01 on revenue of $111.18 billion topped forecasts of $1.93 and $108.92 billion.
• Cook transition looms: Tim Cook is moving to chairman, with veteran insider John Ternus set to take the CEO role — a surprise move sparking concerns about AI strategy visibility.
• Global market leadership: Apple led global smartphone shipments market share in Q1 — the first time it has done so in a first quarter, per Counterpoint.
• Services soar: Services revenue jumped 16.3% year-on-year to $30.98 billion, hitting another all-time record.
• Memory chip headwinds: Like rival Samsung, Apple is grappling with a severe memory chip shortage expected to deepen in 2027.
• Other segments grow: Mac up 5.7% to $8.40B, iPad up 8% to $6.91B, wearables up 5% to $7.90B.

Apple on Thursday posted records for total company revenue and earnings per share, as iPhone sales grew more than 20% for the second consecutive quarter. The blockbuster results marked the tech giant’s first quarterly report since stunning Wall Street with a CEO transition announcement.

The iPhone maker also authorized an additional $100 billion share buyback.

Despite the strong showing, the Magnificent 7 member’s stock initially ticked higher after hours but then reversed course, last trading 0.7% lower.

CEO Transition Casts a Shadow

Apple revealed ten days ago that current chief Tim Cook will move into the role of chairman of the board and will be succeeded by veteran insider John Ternus. The unexpected move caught analysts and investors off guard, raising concerns that Cook was stepping down at a time when the company faces limited visibility on turning artificial intelligence into a meaningful revenue driver.

The Cupertino, California-based company earned $2.01 per share on revenue of $111.18 billion in its fiscal Q2 2026. Analysts had penciled in a profit of $1.93 per share on revenue of $108.92 billion.

iPhone 17 Mania Drives Core Business

Despite the cloud over Apple’s AI ambitions, the world’s third-largest company by market capitalization has reignited momentum in its core smartphone business. Last quarter delivered the tech titan’s best iPhone sales performance in over four years, and the trend extended through this quarter as well.

iPhone sales in fiscal Q2 leapt 21.7% year-on-year to $56.99 billion. In Q1, sales had jumped 23.3% — marking the largest increase since Q4 2021.

Consumers have enthusiastically embraced Apple’s latest iPhone 17 lineup, particularly the premium Pro devices. According to Counterpoint research, Apple led the first quarter of any year in global smartphone shipment market share for the first time ever.

“iPhone achieved a March quarter revenue record, fueled by such extraordinary demand for the iPhone 17 lineup,” CEO Cook said in a statement, adding that the period marked the firm’s strongest March quarter yet.

Memory Chip Crunch Looms

Apple, like many other smartphone players, is wrestling with a memory chip supply crunch. Major rival Samsung Electronics on Thursday warned that its mobile and network division will see profitability decline this year, adding that it expects the severe memory supply shortage to deepen in 2027.

“Continued strong customer demand for our products and services once again helped us achieve a new all-time high for our installed base of active devices across all major product categories and geographic segments,” Apple Chief Financial Officer Kevan Parekh said.

Broad-Based Strength Across Product Lines

Mac revenue rose 5.7% year-on-year to $8.40 billion, while iPad revenue improved 8% year-on-year to $6.91 billion. Apple’s wearables, home, and accessories segment saw revenue climb 5% year-on-year to $7.90 billion.

Apple’s Services segment — encompassing online subscriptions such as iCloud, Apple Music, and fees collected from the App Store — posted sales growth of 16.3% year-on-year to $30.98 billion.

“During the quarter, Services achieved yet another all-time record, and we were excited to introduce remarkable new products to our strongest lineup ever. That included the addition of the iPhone 17e and the M4-powered iPad Air, along with the launch of MacBook Neo, which is captivating customers all around the world,” Cook said.

Big Tech Earnings in Spotlight

Apple’s results come at a time when AI spending plans are being scrutinized like never before. Four of Apple’s fellow Magnificent 7 members on Wednesday delivered a mixed bag of results, with Alphabet, Microsoft, and Meta in particular outlining further expenditures on AI infrastructure.

The tech behemoth’s quarterly report also lands two days after the broader tech sector took a beating amid concerns around AI leader OpenAI’s growth trajectory. A Wall Street Journal report indicating that the ChatGPT developer had recently missed its own targets for new users and revenue — citing people familiar with the matter — weighed heavily on market sentiment.