Apple’s quarterly results on Monday after market close will mark the first earnings call under new CEO John Ternus, with investors looking for clues about the company’s product strategy, artificial intelligence (AI) ambitions, and ability to manage rising memory-chip costs.
Ternus took over from Tim Cook in September after the latter’s 15-year tenure.
His first earnings call comes after Apple introduced several new products, including its first foldable smartphone, the iPhone Duo, a smart home hub and touchscreen MacBook laptops.
The company has also raised prices on some of its products as memory costs increase amid the AI industry’s growing demand for computing infrastructure.
Apple shares AAPL fell 1.39% on Monday ahead of the results.
Revenue growth and iPhone sales in focus
Analysts expect Apple to report revenue of $113.39 billion for its fiscal fourth quarter, covering July through September, according to LSEG data.
That would represent an increase of nearly 11% from the same period last year.
Net profit is expected to rise approximately 6% to $29.04 billion.
However, higher memory-chip costs are expected to weigh on profit growth, making this the company’s weakest quarterly profit expansion in six quarters.
IPhone revenue is forecast to increase around 15% to $56.54 billion, slowing from growth of approximately 22% in the previous quarter.
The results will include only nine days of sales of the new iPhone 18 Pro models.
Meanwhile, Apple’s services business is expected to generate $31.56 billion in revenue, up nearly 10% year over year.
This would mark its slowest growth in more than three years.
D.A. Davidson analyst Gil Luria said in a MarketWatch report that “This is a tricky quarter for Apple with some big cross-currents”.
Ternus faces questions on AI and product strategy
Investors are expected to focus on Ternus’ views on AI and the company’s plans to incorporate the technology into future hardware.
Apple has taken a more measured approach to AI spending than rivals such as Meta, Microsoft and Alphabet.
Its shares have gained approximately 27% this year, outperforming several major technology companies as investors reassess the costs associated with building AI infrastructure.
Morningstar analyst William Kerwin expects Ternus to emphasise Apple’s recent product launches, given his background in hardware engineering.
Investors will also seek updates on the adoption of the revamped Siri and whether Apple can generate revenue by distributing third-party AI agents through its App Store.
Kerwin said Apple’s strategy of incorporating AI into its products and software, rather than competing directly in the model-development spending race, could be a strength.
He argued that Apple needs to be “good enough in AI to defend the iPhone ecosystem.”
Foldable iPhone and rising prices add uncertainty
Apple’s new iPhone Duo could become an important growth driver in the holiday quarter.
However, its launch has encountered some challenges, with customers reporting cracks and lines along the inner display’s central fold.
Apple has offered replacements for affected devices.
Despite the issues, IDC analyst Nabila Popal expects demand to continue exceeding supply.
Bank of America estimates that buyers face average delivery waits of 79 days, with shipments extending into January.
Meanwhile, Apple’s recent price increases could test consumer demand.
The company has raised prices on some iPhone models by $100, while the starting price of the MacBook Air has increased from $999 to $1,299 over the past year.
Investors will therefore look for Ternus to explain how Apple plans to balance faster product launches, higher production costs and its AI strategy while maintaining demand across its hardware and services businesses.
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