Apple Inc. managed to impress Wall Street with a better-than-expected outlook for its fiscal second quarter, despite facing challenges in its first-quarter results. The tech giant reported a 4% year-over-year increase in revenue to $124.3 billion, surpassing analyst expectations. This was largely driven by a robust performance in its services segment, which saw a 14% revenue growth, reaching an all-time high of $26.3 billion. The services business, with its high gross margins, played a crucial role in offsetting the 1% decline in iPhone revenue and the significant 11% drop in sales in Greater China. Apple's CEO, Tim Cook, highlighted the potential of the new Apple Intelligence AI app, which is expected to boost iPhone sales in markets where it is available.
Analysts have noted that Apple's guidance for the upcoming quarter suggests a positive outlook, supported by government subsidies and a reduction in channel inventory in China. This optimism is reflected in the company's forecast of low- to mid-single-digit revenue growth, which has helped to alleviate concerns over the disappointing iPhone sales. The market's confidence in Apple's growth potential is further bolstered by the company's strategic focus on expanding its services and leveraging new technologies like Apple Intelligence to drive future growth.
Apple (AAPL) shares have risen 4.31% to $247.82 as of 8:41 am on January 31st, up from the previous close of $237.59.