Apple reported $109.4 billion in revenue for the third quarter of 2026, a 16% increase from a year earlier, along with a 27% rise in net profit, surpassing analyst expectations [1, 2, 3, 4]. The company’s iPhone business posted a record third-quarter revenue of $54.25 billion, up 22% year-on-year, while Mac revenue jumped 29% to $10.35 billion, both beating estimates [2, 3]. However, services revenue grew 12% to $30.7 billion, falling short of market forecasts and raising concerns among investors [1, 2, 4]. Apple attributed some of the shortfall to significant supply chain challenges, including what CEO Tim Cook described as a "once-in-a-century" memory chip shortage driven by AI data center demand, which constrained their ability to meet customer orders [1, 3]. Cook said, "We currently see very significant supply constraints and very little flexibility to address them. This global memory chip price increases and capacity bottleneck is like a once-in-a-century flood" [3]. To partially offset rising component costs, Apple raised prices on select Mac and iPad models and plans further price hikes on upcoming iPhones [1, 3].

The company forecasted revenue growth of 9-11% for the fourth quarter, below Wall Street’s consensus of 12% [1, 2, 3]. Following the earnings release on July 30, Apple shares dropped 7% in after-hours trading on July 31, closing around $302-$312, down from a July peak near $340 [1, 2, 4]. Some analysts, like Peter Andersen of Andersen Capital, suggested the recent stock gains stemmed more from investors fleeing other tech stocks than fundamental improvements at Apple, while others highlighted Apple’s robust hardware sales as a key driver [5, 2, 3]. Ben Bajarin, CEO of Creative Strategies, warned that Apple’s reported supply inflexibility "is really bad for everyone" given the scale of their operations [1].

After leading Apple as CEO for 15 years and increasing its market value more than tenfold to over $5 trillion, Tim Cook held his final earnings call in July before stepping down on September 1. John Ternus will succeed him as CEO, with Cook transitioning to executive chairman [1, 6, 3]. Apple also announced the rollout of local AI model deployment in China using Alibaba’s Qwen AI, enabling generative AI use on devices despite ongoing geopolitical and regulatory challenges in US-China tech competition [4].

Apple ended the quarter with 1.5 billion paid subscriptions across its services, including Apple Music, Apple TV+, and iCloud, underscoring the company’s growing ecosystem even as services revenue slightly missed targets [6, 2]. The next key date will be September 1, when John Ternus officially becomes CEO, marking a new chapter for the company amid ongoing supply constraints and a cautious outlook for holiday quarter sales [1, 6, 3].