Key insights
- Apple's strong earnings, driven by iPhone and service revenue, defied AI hype and leadership transition concerns. The market reacted positively to the 31% EPS growth, indicating confidence in Apple's core business model and cash generation capabilities. This suggests continued stability and potential upside for AAPL, independent of AI advancements.
AAPL has become a hedge against the AI hype. No AI, just massive revenue gains and profitability year over year through iPhone and hardware sales. Only announcement related to AI would be its switch from OpenAI to Gemini starting in June 2026.
AAPL remains in its lane:
- Phone sales at a colossal $59B * Apple services (digital music, subscriptions) $30.97B * Mac revenue $8.39B
31% EPS which shocked the market by a whopping 23%.
Even the transition from Tim Cook to John Ternus did not affect the pricing of AAPL. The market said, "we don't care who is leading our cash cow. There's enough grass in the field, the cow does not need to be led anywhere just eat and keep pumping out cash."