Apple Shares Pull Back Amid Cautious Guidance and Supply Chain Constraints
Apple shares have pulled back from their July highs to trade around $306 in premarket trading on Monday, August 17. The company's latest quarterly report showed a stronger-than-expected performance: revenue rose by 16% year-over-year to $109.4 billion, setting a record for the June quarter, and diluted earnings per share increased by 29% to $2.02.
The iPhone drove this growth, with revenue rising by around 22% to $54.3 billion, while Mac sales increased by about 29%. Services revenue reached a record $30.7 billion, although it came in slightly below the consensus forecast. However, gross margin stood at 50.1%, but around 2 percentage points of this figure came from refunds of previously paid tariffs; excluding this effect, the margin was around 48.1%.
Despite these impressive results, Apple's guidance for the quarter ending in September has kept investors cautious: the company expects revenue growth of only 9-11% year-over-year, while the market had been looking for around 12%. The main problem remains supply chain constraints, primarily a shortage of advanced manufacturing capacity for Apple Silicon, as well as rising memory costs.
The AI strategy in China is seen as a key growth driver. According to Reuters, the company trained its own large language model for the Chinese market with support from Alibaba. This complements the previously agreed Qwen integration and potentially allows Apple Intelligence to finally launch fully on Chinese devices after passing local regulatory procedures.