Apple's Resilient Q2: Revenue Surges Despite Market Woes and Tariff Challenges

Apple Inc. (AAPL) shares were down 3.74% last week, marking a 1.88% drop over the past week and a 17.92% decline since the start of the year, with a current market capitalization of $3.067 trillion.

Recent insights into Apple's fiscal year 2025 second quarter indicate that the performance slightly exceeded expectations. The company posted revenue of $95.36 billion for the quarter, a year-over-year increase of 5.1%, surpassing the consensus estimate of $94.59 billion. Earnings per share reached $1.65, higher than the anticipated $1.62, setting new records for the March quarter.

Apple predicts tariffs will add $900 million to costs in fiscal year 3Q25, though no product price hikes are planned. Apple plans to adjust its supply chain dynamically to mitigate rising costs, including shifting iPhone production to India for the U.S. market. Meanwhile, production of iPad, Mac, Apple Watch, and AirPods is moving to Vietnam, with China remaining a key production hub for non-U.S. markets.

Looking forward to fiscal year 3Q25, Apple forecasts revenue growth in the low to mid-single digits year-over-year, with gross margins expected to decline slightly, affected by tariff-related costs estimated at $9 billion. Operational expenses are projected to be between $15.3 and $15.5 billion.

The company has authorized up to $100 billion in stock repurchases and increased dividends, continuing its tradition of annual dividend growth for 13 consecutive years. For fiscal year 2Q25, $29 billion was returned to shareholders through dividends and buybacks, with $4 billion in dividend payouts and $25 billion spent on buying back 108 million shares.

iPhone revenue performed beyond expectations, with global shipments up 10% year-over-year, despite ongoing declines in the Chinese market. Fiscal year 2Q25 iPhone revenue reached $46.841 billion, exceeding market expectations. However, shipments in China fell for the seventh consecutive quarter, highlighting regional challenges.

The performance of iPad and MacBook exceeded market predictions, with the former seeing a revenue growth of over 15% due to new product launches, and the latter benefiting from robust shipments driven by corporate demand. Meanwhile, wearable revenue continued its downward trend, impacted by global macroeconomic pressures.

Apple's services revenue achieved record highs for the tenth consecutive quarter, though it fell slightly short of market expectations. The growth in active users, paid accounts, and subscriptions underscores the resilience and growing user engagement, though macroeconomic conditions and tariff impacts could pose future growth challenges.