Apple AAPL.O highlighted on Thursday the enormous demand for its flagship product, the iPhone 17, and the MacBook Neo, which contributed to a solid sales forecast and caused a rise of almost 4% in the value of its shares after the stock market closed.
Apple, however, issued warnings about continued restrictions on chip supply, and forecasts were for easing how it was coping with supply chain pressures and rising memory chip costs thanks to strong demand for its new Mac Neo, robust services growth and strong sales in China.
The optimistic outlook and a new $100 billion stock acquisition reassured investors weighing Apple’s leadership transition in the face of intensifying competition in artificial intelligence.
Apple executives said they expected sales growth of between 14% and 17% in the current fiscal third quarter, which exceeded Wall Street estimates, which pointed to a growth of 9.5% to US$102.93 billion, according to LSEG data.
In the latest quarter, sales of the iPhone, which remains the company’s best-selling product nearly 20 years after its launch, totaled $56.99 billion, slightly below estimates of $57.21 billion.
Apple CEO Tim Cook stated that iPhone sales were slowed during the quarter due to limitations supplying the advanced processor chips that make up the brain of the device. The iPhone 17 family chips are made with a variant of the same TSMC 2330.TW chip manufacturing technology as many leading AI chips.
“Demand has skyrocketed. And right now, the supply chain has a little less flexibility to get more parts,” Cook told Reuters.
Another factor that boosted Apple’s results in the fiscal second quarter was the MacBook Neo, which costs $500 for students. Analysts believe it could help Apple break into a new $20 billion market for low-priced laptops, now dominated by Google’s Chromebooks. Apple said Mac sales, which included several weeks of Neo sales, totaled $8.4 billion, compared to estimates of $8.02 billion.
Sales and earnings were $111.18 billion and $2.01 per share in the fiscal second quarter, which ended March 28, above analyst expectations of $109.66 billion and $1.95 per share.
In the second fiscal quarter, Stocks of memory chips helped Apple cope with rising prices. Apple indicated that gross margins were 49.27%, above estimates of 48.38%.
But memory costs will hit Apple starting in the current quarter, which ends in June. Apple expects gross margins of between 47.5% and 48.5%, a midpoint slightly lower than the quarter just published. That’s still above analyst estimates, which stand at 47.6%.
Cook also noted that Apple is requesting a refund of tariffs paid during US President Donald Trump’s second term and would reinvest those funds in US manufacturing.
Apple’s sales in the Greater China region totaled $20.5 billion, beating analyst estimates of $19.45 billion, according to data from Visible Alpha.
