Apple Needs to Up Its Game to Impress Investors, Says Bloomberg Expert

Apple's Q3 results showed a 10% revenue increase to $94 billion, but investors remain unimpressed due to concerns over the impact of Donald Trump's trade war and the company's slow rollout of AI features. Apple's shares have dipped 17% in the year to date, while Microsoft and Alphabet have gained 25% and are largely flat, respectively. The company is cautious about AI development, prioritizing consumer privacy and potentially considering deals with AI companies to advance its technology.

Title: Apple's Q3 Earnings: Revenue Growth Amidst Trade War and AI Concerns

Apple reported a 10% increase in revenue for its third quarter, reaching $94 billion. This figure exceeded Wall Street's estimates of $89.3 billion. The company's earnings per share (EPS) also beat expectations, coming in at $1.57 compared to estimates of $1.43. Despite these positive financials, Apple's stock has dipped 17% year-to-date, while Microsoft and Alphabet have seen gains of 25% and are largely flat, respectively.

The iPhone, Apple's main revenue driver, saw a significant increase in sales, up 13% year-over-year to $44.58 billion. This performance was notable for being a major beat compared to Wall Street's estimates of $40.06 billion. In China, a competitive market for Apple, revenue grew by 4%, beating estimates. Apple's services revenue also reached a new high of $27.42 billion.

However, investors remain concerned about the impact of Donald Trump's trade war and Apple's slow rollout of AI features. The company's CEO, Tim Cook, acknowledged that Apple's financial hit from tariffs was $800 million in the June quarter, but this cost is expected to rise to $1.1 billion in the September quarter. Additionally, Apple noted an unusual buying pattern among US consumers in April as tariffs made headlines, with Americans buying up more iPhones and Macs.

Cook emphasized that Apple is "very open" to acquisitions to accelerate its AI roadmap. The company has reportedly discussed the idea of acquiring AI startup Perplexity. Despite these efforts, analysts are concerned that Apple is lagging behind its Big Tech peers in the AI race.

Apple's guidance for the September quarter expects total revenue to grow mid-to-high single digits, with Services growing at a similar rate to the June quarter year-over-year. Gross margin is expected to be between 46% and 47%, including the estimated impact of $1.1 billion in tariff-related costs. Operating expenses are expected to be between $15.6 billion and $15.8 billion.

Apple's cautious approach to AI development is evident in its focus on consumer privacy and potentially considering deals with AI companies to advance its technology. The company is prioritizing AI features that are deeply personal, private, and seamlessly integrated into its platform.

References:
[1] https://www.businessinsider.com/apple-q3-earnings-aapl-stock-price-iphone-demand-ai-tariffs-2025-7