Apple Inc (NASDAQ:AAPL, XETRA:APC) delivered a strong start to its fiscal 2026, with robust iPhone sales and record device installations driving better-than-expected revenue and profit for its first quarter, according to analysts, though rising memory costs could temper future gains.
Apple reported total revenue of $143.8 billion for its first fiscal quarter, up 16% year-on-year and above Wall Street estimates of $138.4 billion. Earnings per share came in at $2.84, beating the Street’s forecast of $2.68. iPhone revenue surged 23% to $85.3 billion, with China showing standout growth of 38%, fueled by record upgraders, according to analysts.
Services revenue rose 14% to $30.01 billion, maintaining the division’s steady contribution to margins.
Bank of America analysts highlighted the company’s strong iPhone cycle and improving gross margins. “We remain bullish on shares of Apple heading into 2026 given…record upgraders, gross margins moving higher despite commodity headwinds, AI-enabled Siri later this year, and a foldable iPhone expected in September,” they wrote, reiterating their Buy rating with a $325 price target.
UBS analysts were more cautious about future costs. “Strong iPhone demand was tempered by a ~100 bps quarter-on-quarter deceleration in Services,” they wrote. “The direction of the stock over the next 6-12 months will not be dictated by iPhone or AI innovation, but by the magnitude and impact of higher memory costs on iPhone pricing, demand, and gross margin.” They noted that while memory costs had limited impact in the December quarter, these pressures are expected to grow in the second half of fiscal 2026.
Wedbush analysts emphasized Apple’s China performance and near-term AI initiatives. “Apple reported strong beats on the top and bottom lines led by iPhone, which grew 23% year-on-year, particularly in China with eye-popping 38% growth,” Wedbush’s Dan Ives noted.
Ives also pointed to Apple’s partnership with Google Gemini models to develop a new AI-powered Siri, expecting it to generate new subscription-based revenue for the company’s 2.5 billion device installed base. Wedbush maintained an Outperform rating with a $350 price target.
Jefferies analysts highlighted that while the first-quarter results and guidance beat expectations, valuation limits upside. “Management expects the impact of rising memory costs to be bigger going forward, but we are not worried given Apple’s ability to raise prices,” they wrote, assigning a Hold rating with a $286.54 price target.
Apple guided for fiscal second-quarter revenue growth of 13%-16% year-on-year and gross margins of 48%-49%, above most analysts’ estimates, citing a favorable product mix and continued demand for iPhone 17 models. However, analysts caution that higher component costs and supply constraints could pressure margins in the June and September quarters.
The company’s strong installed base of 2.5 billion active devices is expected to continue supporting Services revenue, analysts said, offering some cushion against hardware cost pressures.