Apple delivered a quarter with iPhone sales exceeding expectations after months under pressure precisely because its main product line wasn't showing growth. However, the company's stock didn't react to the positive numbers. Now, investors are worried about component cost bottlenecks.
On the evening of Thursday, January 29, Apple reported revenue of $143.8 billion for the fiscal quarter ended December 27, 2025, with earnings per share of $2.84 — both at all-time highs for the period. The star was the iPhone : $85.27 billion in revenue, up 23% year-over-year.
The iPhone number is particularly relevant because it addresses a concern that had been plaguing the paper: the feeling that the smartphone cycle was no longer delivering sufficient acceleration.
What Apple has now shown is that demand has reappeared strongly — especially in Asia, with a 38% jump in sales in China — to the point that the company itself projects revenue growth between 13% and 16% for the following fiscal quarter, above what the market expected. This helps to dispel (at least for now) the fear that the Chinese market had become a structural obstacle for the company.
The reaction, however, was in the opposite direction of the result, with Apple's shares falling by almost 2% at the opening of trading on Friday, the 30th. Around 12:40 pm (local time), the stock was down 1.2%.
The reason is that the results came with an "asterisk" precisely where Apple is most criticized: its ability to transform demand into sales without sacrificing margins.
CEO Tim Cook warned of a global DRAM (memory) shortage environment, driven by demand linked to artificial intelligence — a scenario that could impact costs and therefore profitability, as well as impose supply limits. There may also be limitations on processors due to high market demand.
Market analysts believe the quarter was excellent, but there are doubts about the next one due to rising component costs and the risk of bottlenecks in critical parts of the supply chain. Investors are shifting their thesis on the company: Apple may be ceasing manufacturing due to cost, not demand.
Another detail that slightly diminished the overall result: the wearables and accessories category fell short of analysts' expectations. And this segment is usually seen as a complementary driver of growth and customer loyalty.
Humor with technology has changed.
Apple's decline also comes on a day when the technology sector, as a whole, is not helping. The Nasdaq 100 ETF (QQQ) was down about 0.6%, and the technology sector ETF (XLK) was down around 1%. Meanwhile, the S&P 500 was down less, by about 0.35%.
This reaction proves that the market is more demanding regarding valuations: instead of automatically rewarding growth bets, investors want to see clearly that the equation balances in terms of margin and cash generation. Especially at a time when the AI race is starting to demand an increasingly visible investment cost (capex).
The most striking example this week came from Microsoft. Even with strong numbers, the stock plummeted after disappointment with Azure growth and, mainly, with the escalating spending related to AI infrastructure. Shares are down more than 10% this month.
It seems that the rosy world of big tech is becoming more real.
