October 31, 2025

Live: Will Apple Surge Higher After Q4 Earnings Tonight?

Shares of Apple (Nasdaq: AAPL) 2.3% in overnight trading. Investors in the company rode a roller coaster after-hours as Apple shares initially sank after their earnigns release, and then popped on news the company’s Holiday quarter would surpass Wall Street expectations.

We listened to Apple’s conference call and are providing a summary of each question from Wall Street and Apple’s response.

Erik Woodring — Morgan Stanley

Question: Is iPhone 17 cycle strength mainly aging installed-base replacements or specific features? And how are you handling memory/component cost inflation?

(Cook): Strength is product-led; “strongest iPhone lineup ever.”
(Parekh): Procurement driving savings; slight tailwind on memory/storage; GM landed above guide (47.2%); new products start higher cost but cost down over time.

Ben Reitzes — Melius

Question: China trajectory into December—have you turned the corner? And were Services helped by legal/antitrust items (e.g., Google case)?

(Cook): China vibrant; traffic up; iPhone 17 well received; expect Q1 return to growth.
(Parekh): Services outperformance was organic; no unusual benefits from the Google trial.

Michael Ng — Goldman Sachs

Question: What drove the acceleration in Services—bundles, installed base, iPhone cross-sell? And trends in upgraders vs. switchers, promos, inventory?

(Parekh): Broad-based across categories/geos; no single driver.
(Cook): September record for upgraders; too early to read 17 switcher mix; channel inventory low end of target; current 17 models constrained due to demand.

Amit Daryanani — Evercore ISI

Question: December GM bridge—puts/takes given leverage? And China: why Sept weakness and what flips in December?

(Parekh): New products carry higher COGS but favorable product mix and holiday leverage lift GM to 47–48%.
(Cook): Sept Greater China −4% y/y mainly from iPhone supply constraints; expect return to growth in Q1 on 17 reception.

Wamsi Mohan — BofA

Question: Will iPhone 17 constraints be resolved by quarter end, and revenue “left on the table”? Also, sustainability of mid-teens Services growth; Search/licensing?

(Cook): Constrained today; not guiding balance timing; working to fulfill demand. Advertising (first + third party combined) set a record; not breaking out sub-lines.

Samik Chatterjee — JPMorgan

Question: Role of China’s device subsidies in momentum? And OpEx step-up—mix and pace vs. revenue?

(Cook): Subsidies favorable but capped by price thresholds; some products not eligible, still helpful.
(Parekh): OpEx rise mainly R&D for AI and roadmap; despite faster OpEx growth, GM expansion yields healthy operating leverage and OI growth > revenue growth.

David Vogt — UBS

Question: Tariff impact: $1.1B (Sept) to $1.4B (Dec) despite bigger iPhone uplift—how to square? And holiday attach for non-iPhone, Mac outlook?

(Cook): $1.4B assumes current policies incl. China cut 20%→10%, so not linear to units.
(Cook/Parekh): They push ecosystem attach; Mac faces “mother of all launches” compare from last year (plus last year’s DRAM upgrades), but long-term bullish and outgrew market in Sept.

Krish Sankar — TD Cowen

Question: Quantify iPhone constraints; is multi-region manufacturing a factor? And will AI/chatbots change App Store dynamics?

(Cook): Constraints came from under-calling 16 demand and very strong 17 demand; not a manufacturing-capacity issue; not quantifying missed sales.
(Cook): AI creates App Store opportunities; developers adopting on-device models; upside for devs and Apple.

Aaron Rakers — Wells Fargo

Question: Any early mix shift within 17 family (Pro/Pro Max vs. prior cycles)? Update on Private Cloud Compute build-out?

(Cook): Too early to call mix; constrained at both high and entry ends.

(Cook/Parekh): PCC already used for Siri; server plant in Houston ramping; 2025 capex included PCC build-out in first-party DCs.

Atif Malik — Citi

Question: Does iPhone Air reception inform foldable demand?

(Cook): Not a proxy; overall iPhone demand is the story; hence double-digit December guide.

Follow-up (Samik Chatterjee): Strategy on foundation models vs. partners vs. M&A for personalized Siri/AI next year?

(Cook): Building Apple Foundation Models for device + PCC; multiple in development; open to M&A that advances the roadmap.

Richard Kramer — Arete

Question: Are AI features materially influencing purchase decisions vs. iOS retention?

(Cook): Many factors; Apple Intelligence is a factor and expected to grow in importance.

Question (to CFO): With industry AI capex surges and capacity scarcity, will Apple alter its hybrid DC approach? Role of Apple silicon (M5)?

(Parekh): Expect higher AI-related capex; staying hybrid (first-party + third-party). Apple Silicon (A19/M5) underpins strategy; continuing PCC build-out.

Guidance & swing factors (from the call)

Revenue (Dec): +10–12% y/y; iPhone: double-digit y/y; Services: growth rate similar to FY25 (~mid-teens).
GM: 47–48% despite tariffs ~$1.4B.
OpEx (Dec): $18.1–$18.5B, R&D-led (AI).
Constraints: Multiple iPhone 17 models constrained on demand (not manufacturing); potential revenue timing.
China: Sept −4% y/y on iPhone supply; expect return to growth in Q1; subsidies help at certain price tiers.
Capital return: $24B returned in Sept qtr; dividend $0.26 (payable Nov 13, 2025).