Apple said the eruption profits on Thursday, beating Wall Street’s predictions with its greatest income growth since December 2021. However, the market reaction has been silent, analysts citing concerns about long -term problems, including prices and AI.
The company reached $ 94 billion for the quarter ending on June 28, drawn by the high demand for iPhone, the increase in services of services and solid performance on international markets, representing an increase of 10% compared to the same era last year. The profit per share came to $ 1.57, well above the $ 1.43 that analysts had planned. Net profit increased by 12%, while the gross margin reached 46.5%.
Despite the positive results, the company received a moderate investor response, its shares increasing just over 2% of trade after opening hours. Apple has already faced a difficult year and the company’s share price has dropped 17% for the year to date.
“AAPL $ shares have increased by 2% on news and advice, stressing that investors do not believe that it is sustainable,” said Gene Munster, general partner of Deepwater Asset Management, said in a post x. Munster said apple stock had become a story “show-me” while investors are concerned about “prices, regulatory changes and Apple’s IA strategy covered growth”.
The prices have reached costs
The somewhat silent reaction is probably lowered to a few painful points in progress for Apple: the AI breed and the prices of President Trump on China and India.
The prices have reached a little less the company less than previously estimated, costing Apple around 800 million dollars rather than the The CEO of $ 900 million, Tim Cook, predicted in March. Cook said the impact was mainly linked to Trump’s prices against China that struck “at the start of the year”.
Kate Leaman, chief market analyst at Avatrade, said Fortune This apple was clearly nervous about the impact of new prices.
“The risks for Apple are real,” she said. “The regulations are coming and the prices are back in the headlines, the United States being still locked in negotiations with China. And for companies like Apple, global policy and supply chains still have a lot. ”
The problem of prices should get worse for the technology giant before it improves, with costly cost up from the next quarter.
“For the September quarter, assuming that current global rate rates, policies and applications do not change for the balance of the quarter and no new price is added,” said Cook during Thursday’s profits. “We estimate the impact to add about $ 1.1 billion to our costs.”
Dan Ives de Wedbush qualified the prices of “apple problem” despite the fact that the company continues to focus on production in India and the fact that the majority of iPhones sold in the United States are now manufactured in the country rather than China, which had to face the most aggressive prices of the Trump administration.
“Trade policy remains unstable and uncertain, and Apple is perfectly aware of the importance of staying on the right side of the administration, lest it cannot face growing and price,” said Dipanjan Chatterjee, the main analyst VP of Forrester. “It is not surprising that Tim Cook was very special in emphasizing Apple’s continuous investment several times in the United States and in American innovation.”
Pressure on Apple AI roadmap
Apple has been facing criticism for years for the apparent failure of the company to capitalize on AI boom, and the most recent revenues of the company do not seem to have soothed investors.
“AI is the elephant in the room,” said Ives, who was less than impressed by the efforts of the company’s AI, in a note. “While Apple widens its internal AI investments, the reality is that it does not move the needle and the patience is fine on investors.”
Apple recently had a few sure in AI efforts, lose at least four Eminent AI researchers from the Meta “superintelligence” team. In a particularly severe blow to Apple, Meta managed to attract the head of the company’s IA division, Ruoming Pang, with a remuneration package that would have been assessed at more than $ 200 million. The successes of Apple’s talents did not help perception that the company is lagging behind competitors in IA space.
“The AI revolution is the largest technological trend in 40 years and at present, Apple has been looking at this from a drinking park bench while all the other large technological companies rush like F1 pilots building its AI strategy and its monetization plan,” said Ives. “It continues to be the big problem for Cook because in our opinion, it’s a moment of Black Eye for Apple and is the major anchor of the ship.”
Although Cook confirms that Apple increases its internal IA investment, some investors, including IVES, hope that the company will regain land through external partnerships or important mergers and acquisitions. Cook has already reported The company was “open to M&A which accelerated [Apple’s] Roadmap. “”
Chatterjee described the urgency of the AI of the “palpable” company and observed a “silent admission of its slowness in the recognition which it might have to rely on the acquisition to compress deadlines.”
Some investors hope that Apple acquires a perplexity of AI Darling, a fast -growing AI research startup considered as a potential springboard to revise Siri and fill Apple’s space with competitors like Google and Microsoft.
“Rumors swirl on a perplexity agreement, and if this should happen, this can considerably speed up the elusive promise of a more efficient Siri,” said Chatterjee.
