Apple stock price swing with $143B record
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Apple reported record first-quarter earnings on Jan. 29, buoyed by soaring iPhone demand and double-digit revenue growth across nearly all regions. While the results exceeded expectations, management’s silence on full-year headwinds from memory costs left some analysts cautious.Apple Q1 earnings highlightThe iPhone maker posted revenue of $143.8 billion for the quarter ending Dec. 27, 2025. It showed a 16% year-over-year increase, exceeding analysts’ and the company's expectations. Net income rose to $42.1 billion, also exceeding Wall Street expectations. Diluted earnings per share came to $2.84, up from the consensus of $2.68. iPhone revenue climbed 23% year over year to $85.3 billion, marking the strongest iPhone quarter in the company’s history.With a “simply staggering” demand for iPhones, the tech giant also broke records in Services revenue, which reached $30.0 billion, up from $23.6 billion last year, making it a key profit driver. The company also noted its best-ever iPhone quarter in Greater China, where revenue rose 38% year over year.Bank of America noted that the results point to a stronger-than-expected global upgrade, with revenue recovery in China, despite rising raw-material costs, or “commodity headwinds,” that pressured profit margins.Apple declared a dividend of $0.26 per share, noting net cash of $54 billion at the end of the quarter. It also returned $3.9 billion in dividends to shareholders and made open-market purchases of 93 million Apple shares, totaling $25 billion. Earnings at a glance:Revenue $143.8 billion, up 16% year over yearDiluted EPS at $2.84, up from the consensus of $2.68Net income of $42.1 billionDividend $0.26 per shareiPhone revenue at a record $85.3 billion, up 23% year over yearServices revenue at $30.0 billion, up 14% year over yearNet cash of $54 billionFuture outlookApple expects the March quarter revenue to grow 13% to 16% year over year, driven by continued iPhone demand. Gross margin is expected to be between 48% and 49%, while operating expenses are expected to be between $18.4 billion and $18.7 billion, similar to the December quarter.AI pivot: Apple Intelligence and GeminiCook highlighted during the earnings call that the active installed base now exceeds 2.5 billion devices, a new record for the iPhone maker, while noting the growing use of Apple Intelligence.More Tech Stocks:Morgan Stanley sets jaw-dropping Micron price target after eventNvidia’s China chip problem isn’t what most investors thinkQuantum Computing makes $110 million move nobody saw comingMorgan Stanley drops eye-popping Broadcom price targetApple analyst sets bold stock target for 2026However, conversations about Apple’s lagging position in the AI race are still widespread, especially with peers such as Meta releasing tangible AI products (e.g., Ray-Ban AI glasses), and Sam Altman’s vision for an AI hardware device sometime in the second half of 2026.But industry chatter suggests Apple may release a new wearable product in 2027, a pin users can wear on clothing that will feature two cameras and three microphones, TechCrunch reported.Cook also noted an increase in the use of Apple watches overnight to monitor sleep and talked about its collaboration with Google to “develop the next generation of Apple foundation models.”Announced on Jan. 12, Google and Apple entered into a multi-year collaboration, during which Apple will use Google's AI technology for its newer Foundation models. The models will be based on Google's Gemini and cloud technology.In addition, Cook hinted at a new series set for the year that expands on Apple Intelligence. This might be the desired shift in the AI race investors expect from Apple, the company that set standards early on with its iOS and App Store. While Apple TV does not report its active users, Cook mentioned a “36% increase in viewership over the previous year.” Apple recently signed a deal with Peacock last year for a bundle service, a first for Apple TV, and also bought exclusive rights (starting 2026) in a five-year deal to broadcast Formula 1, initially streamed by ESPN. Additionally, its original series "Pluribus" won several awards and nominations, including a Golden Globe for Best Performance by a female actor in a drama TV series.Analyst sentiment following Apple earnings for Q1 2026While the overall reception to Apple’s earnings has been positive, analysts underscored the lack of information on full-year memory pricing, which impacted stock performance after the report. Apple is up 3.3% intraday on Monday, Feb. 2, and was up 4.9% this past week. While the stock is up 13% over the year, it is down around 1.4% year to date.JPMorgan’s Samik Chatterjee raised Apple’s price target to $325 from $315, keeping an overweight rating and citing the Q1 report and outlook, which he expects “should calm investor nerves” around higher memory prices. Investors should instead look at the record production gross margins in Q1 and the implied record level again in Q2, according to TheFly.Bank of America sees the earnings as positive catalysts for a positive year ahead, noting upcoming products and services that could help Apple sustain strong capital returns and emerge as an “eventual winner on AI at the edge and optionality from new products/markets.”Gross margins continue to move higher, despite commodity headwinds.AI-enabled Siri will be available in 2026.The Foldable iPhone is expected in September 2026.Philip Securitiesupgraded Apple to "neutral" from "reduce," raising the price target from $230 to $260 and citing “strong” iPhone 17 growth and the long-term monetization potential of its collaboration with Gemini. Together, it stands to strengthen Apple Intelligence, but also cautioned that with rising memory costs, Apple is still in a “prove-it" phase, TheFly noted.Related: Palantir immigration enforcement bombshell hits just before earnings