Apple sales surge 16% on ‘staggering' iPhone demand

Core Viewpoint - Apple is expected to report strong fiscal first-quarter earnings, driven by anticipated iPhone sales during the holiday season, despite a recent decline in stock price [1][2]. Revenue Expectations - The company forecasts overall revenue growth between 10% and 12% for the quarter, indicating expected revenue between $136.73 billion and $139.22 billion, coinciding with the first full quarter of iPhone 17 sales [2]. Analyst Sentiment - Analysts are optimistic about Apple's earnings, with expectations of a potential earnings beat, although the stock has decreased nearly 11% since its peak on December 2 [2]. Operating Costs and Component Prices - Analysts will inquire about operating costs and the impact of rising component prices, particularly for memory and storage, which have surged due to an AI-driven shortage [3][4]. - Morgan Stanley's analyst Erik Woodring suggests that the market has not fully accounted for the margin impact of rising memory costs in FY26 estimates [4]. AI Strategy - CEO Tim Cook is expected to discuss the company's AI strategy, including the integration of Google's Gemini for Apple Intelligence software and a new, more personal Siri launch [6]. - However, challenges remain in AI commercialization, particularly with rising memory prices potentially complicating financial justifications for AI applications [7]. Financial Metrics - The expected earnings per share (EPS) is $2.67, with projected revenue of $138.48 billion [8].