Investor attention, however, is also expected to focus on how Apple plans to navigate a global memory chip shortage that could raise production costs and pressure profit margins, News.Az reports, citing Reuters.
Apple’s decision to use Alphabet-owned Google’s Gemini technology for a revamped Siri and other Apple Intelligence features marks the most significant shift yet in the company’s AI strategy. Wall Street has largely welcomed the move, arguing that it allows Apple to leverage its installed base of more than two billion devices without incurring the heavy costs associated with developing advanced AI models in-house.
The partnership with Google “should demonstrate to the market the iPhone will remain the consumer device of choice for accessing new AI tools,” analysts at Goldman Sachs said.
Even without the AI overhaul — which has yet to become a major driver of smartphone demand — sales of the latest iPhone 17 series surged in the final three months of 2025, traditionally Apple’s strongest quarter. In China and other developing markets, the company attracted buyers with refreshed camera designs and increased storage capacity in its latest Pro devices.
According to research firm Counterpoint, Apple led the global smartphone market last year with a 20% share, up from 18% in 2024.
Overall, analysts polled by LSEG expect Apple to report a 13.8% increase in iPhone sales for its October–December fiscal first quarter, marking its strongest growth in more than four years. Total revenue is forecast to have risen 11.4% to a record $138.43 billion, supported by a 14.1% jump in the company’s services business.
Sales in Greater China are expected to have climbed by around 15%, according to Visible Alpha data.
Despite the upbeat outlook, Apple’s stock rose just 8.5% last year, lagging behind an AI-driven rally that saw Microsoft shares gain 14.7% and Alphabet jump 65.3%.
Some investors believe Apple can still profit from AI without making the massive infrastructure investments pledged by its Big Tech rivals.
“Apple can probably generate a positive return on very little AI investment, thanks to its distribution,” said Gerrit Smit, manager of the Stonehage Fleming Global Best Ideas Equity fund, which holds Apple shares.
As revenue growth continues, Apple’s services segment — which includes the App Store — could face headwinds from heightened regulatory scrutiny in Europe over its payment practices. The company has already been fined hundreds of millions of euros in the region for abusing its dominant position in the mobile app market.
Looking ahead to fiscal second-quarter sales, analysts have warned that tight global memory chip supplies could push up Apple’s iPhone production costs, potentially weighing on margins, according to a note from Rosenblatt Securities.
