Apple Inc. (AAPL) will report fiscal second-quarter results Thursday after the closing bell, with Wall Street consensus pegging revenue at $94.5 billion (up 4.6% year-on-year) and earnings per share at $1.45, up from $1.40 in the prior-year period. The print arrives a day after Microsoft, Alphabet, Meta, and Amazon and will close out the most consequential earnings week of the calendar.
Apple shares closed Wednesday at $209.84, down 0.4% on the session and up 1.4% year-to-date — a notable lag versus the Nasdaq 100's 6.1% return. The stock's 12-month forward P/E sits at 28.4x, modestly elevated versus its 5-year average of 26.5x, leaving little margin for revenue or guidance disappointment.
Greater China Spotlight
Greater China revenue is consensus estimated at $16.8 billion, down 4% year-on-year, marking what would be the seventh consecutive quarter of decline in the region. Bernstein's Toni Sacconaghi flagged in a recent note that local data from China Academy of Information and Communications Technology shows Chinese smartphone shipments declining 9% in Q1, with foreign-brand share specifically down 11%. Apple's Greater China revenue peaked at $19.8 billion in fiscal Q3 2024.
A new April-launched mid-range iPhone — branded "iPhone 17e" — was priced at RMB 4,499 ($620), undercutting the standard iPhone 17 by 24%. Apple has historically resisted aggressive pricing but the move signals a strategic shift to defend share against Huawei and Xiaomi. Tim Cook is expected to address pricing strategy and Apple Intelligence China rollout — currently expected for the September launch — on the call.
Apple Intelligence and Services
Apple Intelligence, the company's on-device generative AI suite, was launched in iOS 18.1 in October 2024 and has been rolled out across iOS 18.4 markets. The tax for the AI build-out has been reflected in elevated R&D: fiscal Q1 R&D rose 11.3% versus revenue growth of 6.4%. Services revenue, expected at $26.4 billion (+12%), continues to be the gross-margin tailwind, with services gross margins above 75%.
Outlook
Apple has guided fiscal Q3 (June quarter) revenue growth of 13%-16% — implying $107.8 billion to $110.7 billion. A Q3 guide above $110 billion combined with confirmation of Apple Intelligence China launch could push the stock back toward its $239.10 December 2024 record. Failure to provide explicit Q3 guidance — an Apple convention since the pandemic — combined with Greater China weakness could pressure shares back to the $200 round number. Implied move on options is +/- 3.8%.