Why Shares of Apple Are Falling Today
Key Points
- Apple reported strong results that easily beat consensus estimates.
- The company saw its best quarter of revenue growth since 2021.
- A renewed focus on tariffs and weak jobs data may be weighing on shares.
- 10 stocks we like better than Apple ›
Shares of the iconic consumer tech giant Apple (NASDAQ: AAPL) were trading nearly 2% lower at 12:05 p.m. ET today, after the company reported earnings results for its third quarter of fiscal year 2025. Shares had traded close to 3% higher earlier in the day before giving away the gains.
A strong quarter
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Apple reported strong quarterly results, with earnings per share of $1.57 and revenue over $94 billion, easily topping Wall Street analyst expectations. In fact, year-over-year revenue growth of 10% is the highest the company has seen since 2021. iPhone sales surpassed $44.5 billion, compared to consensus estimates of roughly $89.5 billion. Apple also had $800 million in costs in the quarter due to tariffs.
Image source: Getty Images.
"It was an exceptional quarter by any measure," Apple's CEO Tim Cook told CNBC, adding that the company did see a boost from consumers trying to get ahead of tariffs.
Looking ahead, Apple's management team guided for mid- to high-single-digit annual revenue growth in the company's fourth fiscal quarter. Services growth will rival the same 13% growth the company saw in the third quarter, while Apple expects gross margins to fall in the 46% to 47% range, inclusive of associated tariff costs.
Perhaps offset by economic events
It's possible that the strong quarter is being offset by President Donald Trump's renewed focus on tariffs or by the weak jobs data this morning, either of which could lead to the consumer eventually slowing down. I also think investors may want to know more about Apple's plans for artificial intelligence.
Ultimately, I think the strong quarter bolsters Apple's case as a buy, but it's still not the most exciting stock in the Magnificent Seven right now.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
