Key Stats
- Current price: ~$271 (April 30, 2026 close)
- Q2 FY2026 revenue: $111.2B, up 17% YoY (March quarter record)
- Q2 FY2026 EPS: $2.01, up 22% YoY (March quarter record)
- Q3 FY2026 revenue guidance: +14% to +17% YoY
- Services revenue: $31B (all-time record), up 16% YoY
- iPhone revenue: $57B, up 22% YoY (March quarter record)
- New buyback authorization: $100B; dividend raised 4% to $0.27/share
- TIKR model price target: ~$425 (mid case, realized 9/30/30)
- Implied upside: ~57% from current price
Apple Stock Delivers Record Quarter Across Every Geographic Segment
Apple stock (AAPL) posted $111.2B in revenue for Q2 FY2026, up 17% year over year and above the high end of guidance, despite supply constraints on iPhone and Mac.
EPS came in at $2.01, up 22% year over year and a March quarter record, according to CEO Tim Cook on the Q2 earnings call.
iPhone drove the result, generating $57B in revenue, a March quarter record, up 22% year over year, with double-digit growth in the U.S., Latin America, Greater China, Western Europe, India, Japan, and Southeast Asia.
Cook noted on the call that the iPhone 17 family is now the most popular lineup in Apple’s history when measured from launch through the March quarter, with U.S. customer satisfaction recently recorded at 99% by 451 Research.
Services set an all-time revenue record at $31B, up 16% year over year, with all-time highs in both developed and emerging markets and records in most individual services categories.
Mac generated $8.4B in revenue, up 6% year over year, despite supply constraints driven by higher-than-expected demand, with records for customers new to the platform and an all-time high for the Mac installed base, according to Cook on the call.
iPad contributed $6.9B, up 8% year over year, while Wearables, Home and Accessories came in at $7.9B, up 5% year over year.
For Q3 FY2026, management guided for total company revenue growth of 14% to 17% year over year, with supply constraints on Mac Mini, Mac Studio, and MacBook Neo expected to persist for several months, according to Cook on the call.
Operating expenses landed at $18.9B, up 24% year over year, slightly above the high end of guidance due to a one-time SG&A expense, according to CFO Kevan Parekh on the call.
The Board authorized an additional $100B for share repurchases, and Apple raised its quarterly dividend by 4% to $0.27 per share.
Apple also announced that Tim Cook will transition to Executive Chairman on September 1, with John Ternus, currently head of hardware engineering, becoming CEO.
Apple Stock: What the Income Statement Shows
Apple stock is executing a margin expansion story, with gross margin reaching a multi-quarter high in the most recent quarter despite rising memory costs.
Gross margin expanded to 49% in Q2 FY2026, up from 46% in Q2 FY2025 and 47% in Q3 FY2025, continuing a steady improvement arc across the trailing eight quarters.
Operating income reached $35.9B in Q2 FY2026, up 21% year over year from $29.6B in the prior-year quarter.
Operating margin came in at 32% for Q2 FY2026, up from 31% in the prior-year quarter, a sequential compression from 35% in Q1 FY2026 driven by seasonal loss of leverage and higher memory costs, according to Parekh on the call.
Gross profit grew to $54.8B in Q2 FY2026, up 22% year over year from $44.9B, outpacing the 17% revenue growth rate and reflecting a favorable mix shift toward higher-margin Services.
For Q3 FY2026, management guided gross margin to a range of 47.5% to 48.5%, reflecting continued pressure from higher memory costs that are expected to increase sequentially, partially offset by carry-in inventory benefits, according to Cook on the call.
What Does the Valuation Model Say?
The TIKR model prices Apple stock at ~$425 in the mid case, implying approximately 57% upside from the current price of ~$271, realized over a 4.4-year horizon.
The mid case assumes a revenue CAGR of 7.5% and a net income margin of 28%, broadly consistent with the 22% margin Apple reported in the most recent quarter and slightly above the 5-year historical average of 21%.
The Q2 result strengthens the model’s foundation: services at an all-time record, iPhone at a March quarter record, and gross margin at 49% reduce the near-term execution risk embedded in the base assumptions.
The investment case for Apple stock is incrementally stronger after this report, with the primary risk now concentrated in the memory cost trajectory management flagged for the back half of the year.
The real question this earnings report raises: whether Apple stock can sustain margin expansion as memory costs accelerate beyond June, or whether gross margin reverts toward 47% as the tailwind from carry-in inventory fades.
What Has to Go Right
- Gross margin holds at or above the 47.5% floor of Q3 guidance, validating that carry-in inventory and mix offset the rising memory cost trajectory flagged by Cook
- Services sustains its 16% growth rate with continued strength in both developed and emerging markets, keeping the mix shift toward 77% gross-margin services revenue intact
- iPhone demand durability into the second half drives the installed base higher, expanding the monetization runway for App Store, Apple TV, and advertising
- MacBook Neo demand unlocks new education and enterprise customer cohorts at scale, evidenced by early wins like Kansas City Public Schools converting from Chromebooks
What Could Still Go Wrong
- Memory costs are guided to increase “significantly” in Q3 and further beyond, according to Cook on the call, with limited visibility on how long the elevated cost environment persists
- Supply constraints on Mac Mini, Mac Studio, and MacBook Neo are expected to last “several months,” capping near-term revenue conversion from the strongest new product demand cycle in Apple’s recent history
- Operating expenses rose 24% year over year in Q2 FY2026, with R&D spending accelerating faster than the company overall, compressing operating leverage if revenue growth moderates from the current 17% pace
- The CEO transition introduces execution uncertainty at a moment when Apple’s AI roadmap, including a more personalized Siri, remains in development and has not yet demonstrated measurable revenue impact
Should You Invest in Apple Inc.?
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