Apple quietens Wall Street’s fears of China struggles and slow AI progress
Apple has been under pressure this year.It’s playing catch-up to its fellow tech giants on artificial intelligence, it’s seen its stock fall by double digits since the year began, it closed a store in China for the first time ever this week, and looming US tariffs on Beijing threaten its supply chain.On Thursday, the company released its third-quarter earnings of the fiscal year as investors scrutinize how the iPhone maker might turn things around.Despite the gloomy outlook, the company is still worth more than $3tn, and it beat Wall Street’s expectations for profit and revenue this quarter.Apple reported a huge 10% year-over-year increase in revenue to $94.
04bn, and $1,57 per share in earnings,That’s substantially more than the $89,3bn in revenue and $1,43 per share that analysts predicted and is the company’s biggest revenue growth since 2021.
Apple’s iPhone revenue also outperformed Wall Street’s expectations, coming in 13% higher than the same time last year.Tim Cook, Apple’s chief executive, said in a statement that the company was “proud” to report a “June quarter revenue record”, showing growth in its iPhone, Mac and services divisions.On an earnings call on Thursday, he said the quarterly results were “better than we expected”.Dipanjan Chatterjee, a vice-president and principal analyst for Forrester, said rising services tend to boost the company’s revenue stream.“Apple has grown accustomed to having revenue growth in this high-margin services business, which masks other areas of the business not performing as well,” Chatterjee explained.
He pointed to several issues that had led to Apple’s less-than-stellar product performance of late.He said Apple had lagged on hardware innovation, causing “consumer apathy”, and its AI rollout had been glitchy.Apple Intelligence, Apple’s AI product, has been limited to incremental features and rather than transformational upgrades.And it’s been more than a year since Apple announced a suite of AI upgrades to its voice assistant Siri – many of which have yet to be released.“This work [on Siri] needed more time to reach our high-quality bar,” said Craig Federighi, Apple’s vice-president of software engineering, during the company’s developer conference in June.
Donald Trump’s sweeping tariffs have also been a pain point for the company as the US president pushes his desire for manufacturing to boom in the US.The vast majority of Apple’s products are made in China, with about 90% of iPhones assembled there, despite recent efforts to shift production elsewhere.Cook said during the company’s previous quarterly earnings call that he expected the China tariffs to add $900m to its costs this quarter.Apple has attempted to pivot, moving more of its manufacturing to other countries such as India and Vietnam.However, this week, Trump announced a rise in tariffs on India, too, up to 25% starting on 1 August.
Sign up to TechScapeA weekly dive in to how technology is shaping our livesafter newsletter promotionOn Thursday’s earnings call, Cook reminded analysts that Apple had pledged to invest $500bn in the US over the next four years and that “ultimately we will do more in the United States”,He added Apple was “making good progress on a more personalized Siri” and promised a release next year,Because of the external and internal pressures, Apple has seen its share price plummet this year,Once the industry leader of the “Magnificent Seven” – the most valuable publicly traded companies in the world, all American technology giants – Apple boasted the highest-performing stock and biggest market capitalization on the US stock market,Now its share price is the second-worst performing after Tesla in percentage decline among the seven.
Since January, Apple’s stock has fallen roughly 15%,In after-hours trading on Thursday, though, the company saw a slight increase of 2,5% in its share price,
Trump steps up attacks on Fed’s independence amid interest rates row
Donald Trump called on top Federal Reserve officials to seize control from its chair, Jerome Powell, if he fails to cut interest rates, stepping up his extraordinary attacks on the central bank’s independence.The US president called Powell “a stubborn MORON” in a series of critical social media posts on Friday, days after the Fed held rates steady for the fifth consecutive time.It comes as Trump faces heightened questions over the impact of his aggressive economic policy, and the White House presses forward with plans for a fresh wave of tariffs next week.Hours before the federal government released data which underlined a significant deterioration in the jobs market, Trump again broke with precedent to pin blame on the Fed – and urge it to change course.“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW,” Trump wrote on Truth Social, his social network
Barclays follows HSBC in exit from banking industry’s net zero alliance
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Labour MPs urge Thames Water to recover £2.5m paid to executives in April
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US adds just 73,000 jobs in July amid pressure from Trump’s trade war
The US economy added 73,000 jobs in July, far lower than expected, amid ongoing concerns with Donald Trump’s escalating trade war.Forecasters surveyed by Bloomberg had predicted the July jobs report would show a drop in added jobs to about 109,000. The unemployment rate rose to 4.2% from 4.1% in June
Trump to blame for high cost of living, Americans say in new poll
Americans are struggling financially, grappling with debt and the rising cost of living, and are blaming the Trump administration and corporate interests for worsening economic outlooks for working families, according to a new poll.Six out of 10 Americans place blame on the Trump administration for driving up their cost of living, according to a poll conducted by Morning Consult for the Century Foundation, which asked 2,007 Americans how they are managing the high cost of living in the US economy, who they think is to blame and what are the solutions.Sixty three per cent said Trump had had a negative impact on grocery prices, and 61% said he had had a negative impact on the cost of living. Nearly half, 49%, said the Trump administration had had a negative impact on their finances. Nearly eight out of 10 Americans, including 70% of Republicans, fear that Trump’s tariffs will increase the price of everyday goods
Car finance scandal: UK supreme court poised to rule on hidden commissions
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