Apple(US:AAPL) Benzingaยท2025-08-01 15:46Core Viewpoint - Apple Inc. reported a stronger than expected third quarter, surpassing estimates and showing growth in products and services, raising questions about its competitive position in the tech industry [1][3]. Financial Performance - Apple achieved an "unbelievable quarter," with significant acceleration in total company revenue growth, iPhone revenue growth, and Mac revenue growth, defying traditional seasonal trends [3][4]. - The Services segment exceeded expectations and reached an all-time high, contributing to the overall strong performance [6][11]. - Despite facing $800 million in tariff costs, Apple managed to grow its gross margin by 20 basis points year-over-year to 46.5% [10]. Market Position and Competitors - Analysts noted that Apple's operating margin expansion is lagging behind competitors, and the company is spending less on capital expenditures, which may hinder its position in the AI race [7]. - Year-over-year revenue growth rates for the June quarter were reported as follows: Apple +10%, Amazon +13%, Alphabet +14%, and Meta +22% [9]. Analyst Ratings and Price Targets - JPMorgan maintained an Overweight rating and raised the price target from $250 to $255 [8]. - Needham maintained a Hold rating with no price target [8]. - Rosenblatt maintained a Neutral rating and raised the price target from $217 to $223 [8]. - Bank of America maintained a Buy rating and raised the price target from $235 to $240 [8]. Future Outlook - Analysts are monitoring the potential of the upcoming iPhone 17 cycle and the implications of the DOJ vs. Google lawsuit [4]. - There is optimism regarding the strength in iPhone units as the company approaches a form factor change in September 2025, with increased focus on AI potentially setting up a strong 2026 iPhone cycle [12].