Apple Inc's (NASDAQ:AAPL, ETR:APC) stock fell 2% on Thursday and is expected to open in negative terrtory after the company offered cautious guidance for the upcoming holiday quarter, expressing uncertainty about how new AI features will impact device sales.
The forecast for low to mid-single-digit revenue growth this quarter slightly missed Wall Street’s higher estimates.
Apple’s revenue for the third quarter rose 6% to $94.9 billion, with diluted earnings per share of $0.97. iPhone sales grew to $46.2 billion, and the services segment, which includes Apple Pay and the App Store, reached $24.9 billion — a 12% increase.
Sales in China were flat at around $15 billion.
Apple recently launched its “Apple Intelligence” AI features, including enhancements to Siri and AI-driven photo editing tools, initially available in English for the iPhone 15 and 16.
While customer adoption of the new software has doubled, analysts remain cautious about whether these AI-driven upgrades will boost holiday sales.
An upbeat Dan Ives, of Wedbush Securities, believes the guidance contained some positives.
"The Street will debate this print/guide tomorrow morning," he said in a note.
"But ultimately we come away from these results feeling more confident about the AI thesis for Cupertino which will spark a multi-year upgrade cycle that will result in a supercycle and ultimately drive iPhone growth towards the high single digits as the 300 million iPhones in waiting for an upgrade head down this path with iPhone 16."
Wedbush has an 'outperform' rating for Apple stock and a $300.00 price target. Ahead of the bell, the shares are down 1.13% at $223.35.