Apple(US:AAPL) Yahoo Finance·2026-02-01 18:47Core Viewpoint - Apple reported strong quarterly results but CEO Tim Cook indicated a need to reset expectations due to supply constraints and rising component costs [1][4][5]. Financial Performance - Apple achieved revenue of $143.8 billion, a 16% increase year over year, and diluted EPS of $2.84, up 19% year over year, with a net income of $42.1 billion [6]. - The gross margin was reported at 48.2%, exceeding guidance, and operating cash flow reached a record $53.9 billion [6]. - Segment sales included iPhone at $85.3 billion (+23%), Services at $30.0 billion (+14%), Mac at $8.4 billion (-7%), iPad at $8.6 billion (+6%), and Wearables/Home/Accessories at $11.5 billion (-2%) [6]. Supply Chain and Component Costs - Cook highlighted that Apple is in "supply chase mode" due to advanced chip constraints and rising memory prices, which are expected to persist for several years [2][8]. - The memory market is experiencing record demand, with companies like SanDisk seeing stock increases of 1,230% in the past six months [3]. - Apple is facing challenges in balancing supply and demand, with Cook noting that demand is currently outpacing Apple's planning [7][8]. Market Outlook - For the upcoming March quarter, Apple anticipates revenue growth of 13% to 16% year over year and a gross margin between 48% and 49% [6]. - Analysts remain optimistic about Apple's stock, with average price targets suggesting significant upside potential, ranging from $280 to $330 [19]. Pricing Strategy - Apple's pricing strategy for the iPhone has historically shown resilience, with demand remaining strong even at higher price points [14][15]. - Consumer sentiment indicates that while many perceive iPhones as overpriced, a notable percentage still consider them worth the investment despite financial constraints [17].