Apple Delivers Record Quarter, Stock Still Punished Hard Over Memory Chip Crisis
Apple posted its highest-ever June quarter revenue in the third quarter of fiscal 2026 (ended June 27) – and was still sold off on the markets. Revenue rose 16 percent to $109.4 billion, profit climbed 27 percent to $29.8 billion. Diluted earnings per share were up 29 percent at $2.02. In after-hours trading on Thursday, the stock fell by as much as eight percent.
The numbers in detail
Analysts had expected around $108.85 billion in revenue and $27.73 billion in profit, according to FactSet – Apple came in above both. Gross margin stood at 50.1 percent, including roughly two percentage points from tariff refunds; those refunds also contributed $0.11 to earnings per share.
The quarter was carried by the iPhone: the segment grew 22 percent to $54.25 billion. The generation introduced last September – including the ultra-thin iPhone Air and a Pro model with a raised camera bump across the back – continues to sell well, even though Apple raised prices on some models by $100. Mac revenue rose 29 percent to $10.35 billion, helped by the MacBook Neo entry-level line launched in March.
Other areas were weaker. Services revenue grew 12 percent to $30.74 billion, slightly below expectations – and that despite Apple quietly raising prices this month, among them Apple Music, which went from $10.99 to $11.99 per month. Wearables including Apple Watch and AirPods came in at $7.88 billion (up six percent), while iPad revenue shrank six percent to $6.19 billion.
In China, the recovery continued: revenue there rose 22 percent to $18.82 billion. According to Counterpoint Research, Apple accounted for 18 percent of smartphone shipments to Chinese distributors during the quarter – ahead of most local rivals.
The board declared a dividend of $0.27 per share, payable on August 13 to shareholders of record as of August 10.
Why the stock fell anyway
The guidance was the decisive factor. For the current quarter, Apple expects revenue growth of nine to eleven percent – analysts had penciled in around twelve percent. CEO Tim Cook pointed to a supply constraint in a process used to produce the company’s chips. On top of that, Apple expects currency exchange rates to be less favorable than in the previous quarter.
Behind the cautious outlook sits a cost problem affecting the entire industry: the AI boom has driven global demand for memory chips sharply higher. Apple had already raised prices on Macs and iPads last month and expects to pay even more for memory in the current quarter. CFO Kevan Parekh noted that the supply chain has not offered the same flexibility as in earlier years, when Apple could simply chase higher demand with additional production.
Jitesh Ubrani, an analyst at market research firm IDC, called the numbers very good but sees the central question in how Apple handles the memory crunch: rising costs are the biggest source of anxiety for investors.
Expectations play a role as well. Apple had only reclaimed the title of the world’s most valuable publicly traded company this week – a level at which even a modest guidance miss carries outsized weight.
Cook’s final earnings call
These were the last quarterly results Tim Cook presented as CEO. The 65-year-old, who has led Apple for 15 years, will move into the role of executive chairman in September. He will be succeeded by John Ternus (51), until now head of hardware engineering. Cook described the transition on the analyst call as seamless and thanked investors and analysts; Ternus stressed that the company sees significant opportunity in AI and is focused on its plans.
Cook himself described the quarter in the press release as Apple’s strongest June quarter ever and pointed to WWDC26, where the company introduced an all-new AI-powered Siri along with new child safety features. Parekh highlighted June quarter records in earnings per share and operating cash flow, as well as a new all-time high in the installed base of active devices.
