Published: Thursday, April 30, 2026 · 11:43 PM | Updated: Thursday, April 30, 2026 · 11:43 PM
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Apple on Thursday evening reported a strong quarter to wrap up a busy week of megacap earnings. Clearly, CEO Tim Cook’s decision to announce his upcoming departure ahead of the release was a move to ensure that news would not overshadow the incredible results. Revenue in Apple’s fiscal 2026 second quarter ended March 31 increased 17% to $111.2 billion, well ahead of the $109.7 billion expected, according to LSEG. Earnings per share jumped 22% to $2.01, ahead of estimates of $1.95, according to LSEG. AAPL 1Y mountain Apple 1 year performance In fact, it was the best March quarter in company history, and Apple stock jumped 4% in after-hours trading to around $282. A close Friday at that level would be just shy of its December record high. Bottom line While Cook will remain at the helm for a bit longer, it’s clear that incoming CEO Jon Ternus is set to inherit a very strong hand. Sales came in ahead of expectations for all product categories as well as for the highly profitable services business, where growth accelerated on a sequential basis. Better yet, earnings growth outpaced revenue growth as the company was able to expand profit margins for both products and services to a level above what the Street was looking for. Apple, once again, achieved an all-time high installed base of active devices — over 2.5 billion — across all product categories and geographic segments. That’s crucial because — while we are still waiting to hear more about Apple’s Siri AI initiative, and Cook did affirm on the call that “a more personalized Siri” will indeed be coming this year — the opportunity for Apple to officially enter the generative/agentic AI race is as strong as ever. Apple has chosen Google as its AI partner. Cook also said, “We’re happy with the work that we’re doing independently as well.” While Services punches way above its weight class for earnings, thanks to a gross margin profile that is nearly double that of the products category, it’s the installed base of active devices that represents the gateway through which those services can be sold. So, the larger the installed base, the larger the total addressable market for Apple’s high-profit services offerings. Lastly, regarding share repurchases, Apple’s board authorized another $100 billion buyback program and authorized a 4% increase to the company’s cash dividend payout. Noteably, CFO Kevan Parekh said on the call, “We plan to continue our capital allocation philosophy of first making all the necessary investments needed to support the business and then returning excess cash to shareholders over time. Net cash neutral has been a valuable framework for our capital structure. Since 2018, we have significantly rightsized our balance sheet and reduced net cash by over $100 billion. As we move ahead, we are no longer providing net cash neutral as a formal target, and we will independently evaluate cash and debt.” We don’t foresee this being an issue as management clearly still views repurchases as an important contributor to overall shareholder value creation. Why we own it Apple’s dominant hardware and high-margin services businesses provide a deep competitive moat and plenty of bundling opportunities. Competitors: Samsung, Xiaomi, OPPO, Dell , and HP Inc. Most recent buy : April 8, 2014 Initiation : Dec. 2, 2013 These results, once again, demonstrate why you don’t attempt to trade around a consistently best-in-class name like Apple. You own it for the long haul. For all the concern about tariffs, energy prices, and rising memory costs, which are perhaps most impactful to Apple’s profit margin, the team did a fantastic job navigating the crosscurrents. To be sure, memory prices will remain a material headwind in future quarters, but we are confident management will continue to navigate the environment effectively. We think the stock move off the Iran war March low can now be trusted. With an AI update expected later this year, the groundwork has been laid for shares to reach new highs. We’re reiterating our $300 price target and hold-equivalent 2 rating . CEO Transition Speaking on why he chose now to announce his departure, Cook said it was the right time for several reasons. “First, our business has been performing extremely well. The first half of this year was very strong, growing double digits year over year. Second, our roadmap is incredible. Most importantly, we have the right leader ready to step into the role. As l have said, there is no one on this planet I trust more to lead Apple into the future than John Ternus.” Cook continued, “John is a brilliant engineer, a deep thinker, a person of remarkable character, and a born leader. I know he will push us to go further than we think is possible in order to deliver the greatest products and services for our users. I have been so proud to call him a colleague and a friend, and I will be even more proud to call him Apple CEO. Over the coming months, John and I will be working closely together to make sure this transition is perfectly smooth.” Cook plans to move into the role of executive chairman on Sept. 1. Ternus also hopped on the call. He said, “It means a great deal to me to have Tim’s trust and confidence. … As you know, one of the hallmarks of Tim’s tenure has been a deep thoughtfulness, deliberateness, and discipline when it comes to the financial decision making of the company. I want you to know that as something Kevin [Parekh] and I intend to continue.” Ternus added, “When I transition into the [CEO] role in September, this is an especially exciting moment for Apple. As Tim mentioned, we have an incredible roadmap ahead. While you are not going to get me to talk about the details of that roadmap, suffice it to say this is the most exciting time in my 25-year career at Apple to be building products and services.” Quarter commentary Products revenue increased 16.7% year over year to $80.21 billion in fiscal Q2, outpacing the $78.21 billion estimate. Similar to what we saw last time, the strength in hardware can be attributed to robust iPhone demand, where sales grew nearly 22% to $56.99 billion, a level above Street expectations and amount to a March quarter record for the company. On the call, Cook said the iPhone 17 lineup is the most popular in the company’s history. We have seen some estimates floating around from data providers that make the iPhone results look like a miss. However, based on FactSet estimates, it was a beat. More importantly, whatever you choose to call it, iPhone sales growth was impressive and even more so when we consider that on the conference call, Cook said that sales of Apple’s flagship product suffered supply constraints. That iPhone growth came on top of year-over-year increases in sales for all other product categories, from Mac to iPad to the Wearables, Home & Accessories business. Sales for all product lines were better than expected. The 5.7% increase in Mac sales included the debut of the MacBook Neo in the March quarter. Neo is a lower-cost laptop aimed at taking share from Windows-based laptops and Chromebooks. Product gross margin performance was also a bright spot, increasing 276 basis points, or 2.76 percentage points, to 38.7%. That was ahead of the 36.6% estimate. Services revenue, which hit an all-time high, saw growth accelerate slightly from about 14% in the company’s fiscal first quarter to just over 16% in fiscal Q2. That resulted in a $600 million beat versus expectations. Services revenue includes sales from Apple TV, advertising, cloud services, music and payment services, and App Store. Service gross margins expanded 93 basis points, or nearly 1 percentage point, to 76.7%, edging out the 76.3% estimate. Outlook Apple’s revenue outlook for the current June quarter (the company’s fiscal 2026 third quarter) exceeded the consensus view. June quarter revenue is expected to increase by 14% to 17% versus the year-ago period, a much stronger forecast relative to estimates for about 9% growth. To put some numbers around it, Apple’s growth guide implies revenue in the range of $107.2 billion to $110.02 billion. For comparison, the LSEG consensus stands at $102.93 billion. Services revenue is expected to grow in the June quarter at a similar rate to what Apple just reported, less the benefit from foreign exchange dynamics, which accounted for a little over 2.5 percentage points of growth in the March quarter. Companywide gross margin for the June quarter is expected to be between 47.5% and 48.5%, exceeding expectations of 47.6%, at the midpoint, according to FactSet. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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