Apple's fiscal 2026 third-quarter revenue rose 16% to $109.42 billion and earnings per share jumped 29% to $2.02, beating estimates on both lines. Shares still fell nearly 6% in after-hours trading as a global memory-chip shortage squeezed margins and clouded the outlook. CNBC's Investing Club raised its price target on the stock to $340 from $300 while keeping a hold-equivalent rating.
Apple's fiscal 2026 third-quarter revenue climbed 16% to $109.42 billion, topping the $108.65 billion analysts polled by LSEG expected. Earnings per share jumped 29% to $2.02, also ahead of the $1.89 estimate, though tariff refunds added about 11 cents to that figure. It was a good but not great quarter as Apple worked to mitigate a global memory-chip shortage that is expected to be a bigger headwind ahead, and shares fell nearly 6% in after-hours trading Thursday evening.
Memory costs squeeze margins
Apple's reported gross margin came in at 50.1%, better than expected and higher than a year earlier. Management said the figure included roughly a 2-percentage-point benefit from tariff refunds, and stripping that out, the Products segment margin fell to about 38.1% from a reported 40.1% — still ahead of the 36.7% the Street had modeled.
Services margin held roughly flat year over year at 75.6%, even as the segment's mix weighed on the total. Outgoing CEO Tim Cook described the pricing environment as a "100-year flood on the memory pricing" and said he expects memory costs to keep rising beyond September.
Price hikes, a record valuation, and a new target
Apple had already moved to offset the pressure: on June 25 it announced bigger-than-expected price increases on its MacBooks and iPads. The stock had its worst single session in more than a year that day, a session that also marked a near-term bottom — shares have since climbed to record highs and briefly made Apple the second U.S. company with a market value over $5 trillion. Against that backdrop, CNBC's Investing Club raised its price target on Apple to $340 from $300 while keeping a hold-equivalent rating, pointing to 2027, when broader availability of Apple Intelligence could lift what buyers are willing to pay for an iPhone.
Leadership handover and next quarter's guidance
Cook steps back into an executive chairman role on Sept. 1, handing the CEO title to John Ternus, and September also brings Apple's annual iPhone launch event. For the current quarter, Apple guided to revenue growth of 9% to 11%, below the 12.1% growth the Street had modeled. The company also said it expects supply constraints to increase significantly across iPhone, Mac, and iPad. Companywide gross margin is guided to 47% to 48%, a figure that still includes a 1-percentage-point tariff-refund benefit.
Source: US Top News and Analysis (CNBC)
Trading involves risk.
Risk Disclaimer
