Apple Q1 Revenue Hits $143.8 Billion, Up 16% Year-Over-Year; iPhone Revenue Reaches Record $85.3 Billion

Apple Inc. (AAPL) reported record revenue for the first quarter of fiscal 2026, reaching $143.8 billion, a 16% increase compared to the same period last year. The company’s earnings per share (EPS) came in at $2.84, up 19% year-over-year, surpassing analyst expectations across the board. The results were driven by record iPhone sales, which generated $85.3 billion in revenue, a 23% increase from the prior year.

Apple’s Services segment also performed well, contributing $30 billion in revenue, a 14% increase from the same quarter last year. The Services business, now the company’s second-largest revenue stream, continues to provide a stable, recurring income stream.

China sales experienced a notable rebound, climbing nearly 38% year-over-year to $25.5 billion. This marked a significant turnaround for the region, which had seen declining sales in the previous three out of four quarters according to analysis.

Why Did This Happen?

The strong Q1 performance was primarily fueled by robust demand for the iPhone 17 lineup, which launched in September 2025. Tim Cook, Apple’s CEO, highlighted “unprecedented demand” across all geographic segments. The success of the iPhone 17 models contributed to a record number of upgraders and switchers, especially in China as reported.

The Mac and iPad businesses also contributed to the overall revenue. Mac revenue came in at $8.4 billion, while iPad revenue totaled $8.6 billion. Wearables, Home, and Accessories generated $11.5 billion in revenue, though this segment showed less dynamic growth compared to the iPhone and Services according to Q1 earnings analysis.

How Did Markets React?

Despite the strong results, investors remained cautious about the sustainability of Apple’s growth, particularly in key markets like China. The company’s stock rose about 1% in after-hours trading but faced resistance as market participants weighed the durability of the current momentum. Technical indicators suggest the stock has fallen below both its 50-day and 100-day moving averages, though the $240 level held firm as support according to market data.

Analysts have mixed outlooks for Apple’s stock. Jefferies lowered its price target to $276.47 from $283.36, citing a slowdown in services revenue. Morgan Stanley, however, maintained an Overweight rating and a $315 price target, citing strong iPhone performance as reported.

What Are Analysts Watching Next?

Investors are closely watching the long-term sustainability of Apple’s growth. Jefferies warned that Apple’s services revenue growth has slowed to its lowest rate in seven quarters, with App Store revenue increasing by just 7% in the December quarter according to earnings analysis.

The company’s AI ambitions are also under scrutiny. Apple has been investing heavily in AI research, with R&D expenses reaching $10.89 billion in the quarter. While Apple plans to use Google’s Gemini models to enhance Siri, its AI initiatives lag behind those of competitors like Samsung according to industry reports.

Looking ahead, Apple will report Q2 results in the coming months. Analysts expect $104.84 billion in revenue for the second quarter. The market will be watching how Apple balances ongoing AI investment with hardware and platform priorities according to earnings projections.

Capital expenditures decreased to $2.37 billion in the quarter, reflecting a shift in focus toward efficiency. Apple also returned nearly $32 billion to shareholders through buybacks and dividends, signaling strong confidence in its financial position according to financial analysis.

Apple’s ability to sustain its momentum in key markets like China and maintain growth in the Services segment will be critical for its long-term performance. The company’s upcoming product releases and AI developments will also play a pivotal role in shaping investor sentiment in the near future as reported.