Why Shares of Apple Are Falling Today
Shares of Apple (AAPL) fell nearly 2% after reporting strong Q3 earnings with $1.57 EPS and over $94 billion in revenue, exceeding expectations. Despite a 10% year-over-year revenue growth, iPhone sales were below estimates. CEO Tim Cook highlighted the exceptional quarter but noted potential impacts from tariffs and economic conditions. Looking ahead, Apple anticipates mid- to high-single-digit revenue growth for Q4, with services growth matching Q3's 13%. Investors remain cautious amid economic uncertainties and seek clarity on Apple's AI plans.
Shares of the iconic consumer tech giant Apple (AAPL -2.28%) were trading nearly 2% lower at 12:05 p.m. ET today, after the company reported earnings results for its third quarter of fiscal year 2025. Shares had traded close to 3% higher earlier in the day before giving away the gains.
A strong quarter
Apple reported strong quarterly results, with earnings per share of $1.57 and revenue over $94 billion, easily topping Wall Street analyst expectations. In fact, year-over-year revenue growth of 10% is the highest the company has seen since 2021. iPhone sales surpassed $44.5 billion, compared to consensus estimates of roughly $89.5 billion. Apple also had $800 million in costs in the quarter due to tariffs.
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"It was an exceptional quarter by any measure," Apple's CEO Tim Cook told CNBC, adding that the company did see a boost from consumers trying to get ahead of tariffs.
Looking ahead, Apple's management team guided for mid- to high-single-digit annual revenue growth in the company's fourth fiscal quarter. Services growth will rival the same 13% growth the company saw in the third quarter, while Apple expects gross margins to fall in the 46% to 47% range, inclusive of associated tariff costs.
Perhaps offset by economic events
It's possible that the strong quarter is being offset by President Donald Trump's renewed focus on tariffs or by the weak jobs data this morning, either of which could lead to the consumer eventually slowing down. I also think investors may want to know more about Apple's plans for artificial intelligence.
Ultimately, I think the strong quarter bolsters Apple's case as a buy, but it's still not the most exciting stock in the Magnificent Seven right now.
