Apple's Q3 Revenue Seen Up 15.5%, Cook's Final Earnings Before Transition

Apple (AAPL-US) will release its fiscal 2026 third-quarter results (ended June 30) after US market close on Thursday (30th). With iPhone prices held steady while competitors raised prices due to rising memory costs, Apple's revenue is expected to achieve its strongest year-on-year growth in five years for the June quarter.

This earnings call will also mark the final one led by CEO Tim Cook before his retirement. Beyond financial figures, the market will scrutinize how incoming CEO John Ternus will tackle challenges including memory shortages, product price hikes, and Apple's lag in artificial intelligence (AI) deployment.

Apple's stock has risen nearly 25% this year, briefly surpassing $5 trillion in market capitalization on Tuesday and overtaking Nvidia (NVDA-US) to reclaim the title of the world's most valuable company. Apple had previously faced investor criticism for not following other tech giants in heavily investing in AI data centers. However, as the market begins questioning the return on investment (ROI) of massive AI spending, Apple's relatively conservative strategy is now gaining favor.

Pricing Strategy Pays Off: iPhone Revenue Forecast to Rise Over 20%

According to LSEG estimates, Apple's quarterly revenue is expected to grow 15.5% year-on-year to $108.65 billion. While slightly below the previous quarter's growth rate, this would mark the strongest fiscal Q3 performance since 2021. Profits are forecast to rise 18.1%, though gross margins may decline from the prior quarter's 49.3% to 47.9%.

iPhone will be the primary growth driver, with revenue expected to surge 20.8% year-on-year—the strongest such increase since 2021. Research firm Counterpoint estimates that while global smartphone shipments fell to a 13-year low last quarter, iPhone shipments still grew 3%, pushing Apple's market share close to 20%. Mac revenue growth is expected to accelerate from 5.7% to 8.7%, while iPad revenue growth is forecast to slow from 8% to 5.2%.

The massive build-out of AI data centers has caused shortages in memory and storage chips. Last month, Apple raised the starting prices of iPads and Macs by at least $100, with some models increasing over $1,000—though it has not yet raised prices on its core iPhone lineup. Analysts widely expect Apple to increase iPhone prices when it launches new models in September, with the full impact likely to emerge during the year-end holiday season.

Cook's Final Earnings Call: AI Challenges Passed to Ternus

Cook is scheduled to step down as CEO on September 1 and transition to Executive Chairman. John Ternus, head of hardware engineering, will succeed him as Apple's second new CEO since Steve Jobs. Under Cook's 15-year leadership, Apple's market cap grew approximately 14-fold, though the company has not launched a new hardware platform rivaling the iPhone, and the high-end Vision Pro has yet to gain mass-market traction.

While major cloud providers are spending over $100 billion annually on AI capital expenditures, Apple's full-year capex is estimated at just over $11 billion, primarily advancing AI through Google's technology and cloud services. Apple's redesigned Siri launched in beta in June and is expected to roll out officially with new iPhones this fall. Market adoption will be a key test for Ternus after taking office.

Apple has recently adjusted its cash policy, moving away from its previous emphasis on maintaining 'net cash neutrality' (equal cash and debt), potentially preserving more flexibility for expanded AI investments. As the Cook era draws to a close, the market will watch whether Ternus shifts Apple's conservative AI investment strategy and whether price hikes can sustain revenue and profit growth without dampening demand.