Apple Faces Supply Chain Challenges Ahead of Product Launch
Apple is set to unveil its latest products at an upcoming event, including the iPhone 18 Pro and Pro Max powered by a new A20 Pro chip. The company's first foldable phone, rumored to be called the iPhone Ultra, will also make its debut.
The iPhone 18 Pro and Pro Max are expected to have a similar design to last year's iPhone 17 Pro, but with some minor changes. The Pro Max may get a larger battery and weight increase. Apple Watch Series 12 and Ultra 4 models are also due for release.
Apple's shares have risen 18% this year, outperforming peers like Alphabet and Microsoft. However, the company faces challenges in terms of supply chain constraints and rising costs. Management expects gross margin to compress to 47-48% in the fiscal fourth quarter, down from 50.1% in the June quarter.
Despite these challenges, Apple's long-term story remains strong, with growth expected in devices, AI features, services, and cash returned to shareholders. The Zacks Consensus Estimate for AAPL's fiscal 2026 and 2027 EPS implies year-over-year growth of 18% and 8%, respectively.