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Major Market event Mon, Nov 2 2 min read
Apple reported fiscal fourth-quarter 2026 revenue of $114.5 billion, up 12% from a year earlier and a September-quarter record, for the period ended September 26. Diluted earnings per share rose 14% to $2.10.[1][2] iPhone revenue increased 17.5% to $57.6 billion, beating expectations.[3]
Gross margin was 47.9%, meaning Apple retained about 47.9 cents of each revenue dollar after direct product and service costs. Tariff refunds added roughly one percentage point to that margin and $0.05 to earnings per share.[1]
Apple expects revenue to grow 7% to 10% in the coming holiday quarter, but forecasts gross margin of 45% to 46%. It attributed the margin pressure to higher memory costs and expenses related to its Siri AI digital assistant.[4][3]
Memory is an essential device component, so higher prices increase Apple's cost per device. Apple had already raised selling prices, and iPhone and Mac sales remained strong, but its holiday margin forecast shows that sales growth is still leaving cost pressure to absorb.[5][3] Excluding tariff refunds, September-quarter gross margin was about 46.9%; the coming quarter's forecast therefore still implies a decline of roughly 0.9 to 1.9 percentage points, leaving less gross profit from each revenue dollar.[3]
Services' ability to cushion hardware cost pressure also faces a test. Apple expects slower holiday-quarter services growth while absorbing cloud-computing expenses for Siri AI, making it harder for additional services revenue to offset rising device costs.[6]
Apple's margin warning means rivals buying memory also need to weigh higher selling prices against absorbing the cost. Their exposure depends on each brand's pricing power and customer demand.[5][3]
Apple's higher memory bill points to an opportunity for suppliers to secure better selling prices. Revenue and profit could benefit if shipment volumes hold up and suppliers' own costs do not absorb the gains.[3]
Apple is taking on Siri AI cloud costs as services growth slows. For consumer AI providers that also buy computing capacity, this highlights the profitability test of earning enough revenue to cover ongoing computing costs.[6]