Apple's New CEO Nails His First Quarter, and the Stock Slips Anyway

John Ternus has been running Apple since Tim Cook handed him the keys on September 1. Monday night was his first earnings call as CEO, and on paper it went great. Apple pulled in $114.48 billion in revenue for its fiscal fourth quarter, up 12% from a year ago and ahead of Wall Street's roughly $113.4 billion. Adjusted earnings came in at $2.10 a share against forecasts of $1.99.

The iPhone did the heavy lifting. Sales hit $57.58 billion, up 17%, and that's with only eight days of iPhone 18 Pro sales in the quarter and none of the new foldable. The Mac was the surprise star, jumping almost 24% to $10.79 billion thanks to the Mac Studio and Mac Mini refresh in August. The soft spots were the iPad, down more than 10%, and services, which grew less than 10% for the first time since 2022.

So why did the stock fall almost 3%? Two words: memory costs. AI data centres are gobbling up memory chips, and prices have jumped. Apple already raised most iPhone prices by about $100 in June, and buyers didn't seem to mind. But CFO Kevan Parekh guided holiday-quarter growth to 7% to 10%, below the 11.4% analysts wanted, and said gross margin would slip to 45% to 46%.

The AI question also hangs over everything. Apple's new Siri chatbot launched this quarter, but plenty of people think it already feels behind rival assistants that can handle multistep tasks. Ternus wouldn't say how Apple plans to make money from AI, only that it has "lots of opportunities."

Even after the dip, Apple stock is up more than 24% this year, well ahead of the S&P 500.