Apple shares popped more than 4% on Friday morning after reporting huge demand from shoppers for its flagship iPhones and MacBooks – but Wall Street still has questions about the company’s artificial intelligence strategy.
The Big Tech giant crushed earnings expectations in second-quarter results released Thursday, bolstered by recent releases such as the $599 MacBook Neo, updated versions of the higher-end MacBook Pro and iPad and the iPhone 17e.
Sales of iPhones rose 21.7% to nearly $57 billion, while overall revenue jumped to $111.2 billion. Apple CEO Tim Cook, who will transition to role as executive chairman on Sept. 1, said the earnings beat occured despite shortages of its MacBook and iPhones in stores.
Incoming CEO John Ternus, who currently serves as Apple’s hardware chief, made his debut on the company’s earnings call, said the company has an “incredible roadmap ahead.”
“While you’re not going to get me to talk about the details of that roadmap, suffice it to say, this is the most exciting time in my 25-year career at Apple to be building products and services,” Ternus said.
Apple projected its overall revenue would jump 14% to 17% in the current quarter – well above the roughly 9% sales growth that analysts had expected.
China sales were another strong spot for the company. Sales in the region rose 28% to $20.5 billion for the quarter.
While sales figures were strong, Apple still faces some potential speed bumps in the months ahead.
Cook acknowledged that the firm is in the midst of a memory crunch, with “significantly higher” costs for key components needed in its hardware devices expected to weigh on its margins for the foreseeable future.
Investors also will be watching closely when Apple holds its Worldwide Developers Conference in June, where the company is expected to provide updates on its AI strategy.
Apple has infamously struggled to integrate AI into its product lineups – and notably had to delay a much-hyped revamp of its Siri voice assistant due to bugs and glitches.
“With iPhone 17 firing on all cylinders, China a clear tailwind, the June guide well ahead of the Street, and Ternus about to take the wheel heading into WWDC, it’s all about the AI strategy,” Wedbush analyst Dan Ives said in a note to investors.
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