Apple's Strong Earnings Can't Shield Stock from Market Fears
Apple's latest earnings report sent shockwaves through Wall Street, but not for the reasons investors expected. The tech giant reported record revenue and a 22% jump in iPhone sales, beating analyst estimates on both fronts.
The company's fiscal third-quarter results showed revenue of $109.4 billion, up 16% year over year, with diluted earnings of $2.02 per share, surpassing the estimated $1.89 per share. Net profit rose by 27% to $29.8 billion, while iPhone revenue climbed 22% to $54.3 billion.
However, despite these impressive numbers, Apple's stock price plummeted nearly 10% on July 31 and shed over $400 billion in market capitalization over two days. This sudden drop briefly returned Nvidia as the world's most valuable company.
The disconnect between strong earnings and a sharp decline caught investors off guard, with many attributing it to weak forward guidance. Apple forecasted revenue growth of 9% to 11% for the September quarter, falling short of Wall Street expectations. This downward revision has sparked concerns about decelerating growth from its recent pace.