Apple Stock Drops After Guidance Disappoints Despite Record Q4 Results

Apple Inc. shares fell in extended trading following the release of its fourth-quarter and full-year fiscal 2026 financial results, which marked the first earnings call delivered by newly appointed Chief Executive John Ternus. Although the tech giant posted headline figures that exceeded analyst predictions, concerns over future revenue growth and projected gross margins weighed heavily on investor sentiment.

For the quarter ending September 26, 2026, Apple reported a 12% increase in revenue year over year, reaching $114.48 billion and surpassing the $113.39 billion consensus forecast by Wall Street. Diluted earnings per share came in at $2.10, comfortably topping the anticipated $1.99 per share. The company noted that its quarterly gross margin hit 47.9%, which included a favorable impact of approximately one percentage point from tariff refunds.

The strong quarterly performance was largely driven by robust iPhone and Mac sales. iPhone revenue reached $57.58 billion, marking a 17% increase from the previous year and beating estimates despite the period including only eight days of sales for the new iPhone 18 Pro line. Meanwhile, Mac sales climbed nearly 24% to $10.79 billion, fueled by the launch of new Mac Studio and Mac Mini laptops in August. However, the iPad division experienced a downturn, with sales declining more than 10% to $6.3 billion due to supply constraints and tough comparisons.

Chief Financial Officer Kevan Parekh provided guidance for the upcoming holiday quarter, projecting revenue growth between 7% and 10%. While this forecast exceeded the average analyst expectation of 6.4%, some market participants had anticipated higher momentum. Furthermore, Apple projected its gross margin for the current quarter to fall between 45% and 46%, trailing the average estimate of 46.3% and declining sequentially from the fourth quarter.

During the earnings call, CEO John Ternus addressed the company's product roadmap and artificial intelligence strategy. Ternus highlighted that regular iPhone 18 models and the new iPhone Air will not arrive until the first half of 2027. He also defended Apple's position in artificial intelligence, emphasizing ongoing monetization opportunities in hardware and services following the recent rollout of the new Siri AI feature.

Despite beating fourth-quarter expectations, Apple's high valuation and slowing growth in certain segments continue to draw scrutiny from financial analysts. The company's services business grew by less than 10% during the quarter to $31.57 billion, its slowest rate of expansion since September 2022. Following the earnings and guidance release, Apple's stock dropped nearly 3% in extended trading, though it remains up more than 24% for the year to date.