Apple shares fall on cloud miss despite US chip pivot
Apple posted better-than-expected earnings late Thursday, as iPhone sales held up strongly in the face of growing consumer anxiety over incoming US tariffs.
But shares slipped nearly 3 per cent in after-hours trading, as a muted performance from its services unit and continued delays in its AI rollout tempered investor optimism.
The California-based tech behemoth reported revenue of $95.4bn and net income of $24.8bn for the March quarter – both narrowly ahead of Wall Street expectations.
The standout figure was iPhone revenue, which climbed to $46.8bn thanks to demand for Apple’s new mid-market iPhone, designed to hit a $599 price point while supporting the firm’s growing array of AI features.
Consumers rush to buy ahead of tariffs
Fears over tariffs appear to have triggered a consumer pull forward, particularly in the US, where Apple has faced pressure over its China-heavy supply chain.
While electronics have so far been spared from presidentTrump’s steepest new levies, Apple remains exposed to a 20 per cent tariff on Chinese imports, and could face more if talks sour.
Chief executive Tim Cook said inventory levels remained balanced, indicating there was no major stockpiling – but analysts believe the spectre of trade penalties may have buoyed sales.
“Apple edged out a beat thanks to resilient iPhone sales, though it’s unclear how much of that is sustainable once tariffs bite,” said Matt Britzman, equity analyst at Hargreaves Lansdown.
“Apple remains the world’s strongest consumer brand, but it’s also navigating multiple headwinds – from AI delays to manufacturing moves and intense competition in China.”
In a nod to growing political pressure in Washington, Cook also announced that Apple would source $19bn worth of chips from US-based factories.
The move is likely to help Apple soften scrutiny from lawmakers and Trump, who has called on major tech firms to “build in America”.
AI ambitions delayed
Apple’s services division, including iCloud, the App Store, and Apple TV+, posted revenue of $26.65bn, slightly under forecasts.
The shortfall added to worries around Apple’s positioning in AI, where its long-promised Siri upgrade has now been pushed back to 2026.
“The Siri delay reflects a deeper issue with Apple’s execution discipline,” said Chris Allinson, partner at Yonder Consulting. “This was once the most reliable product machine in tech. Now it’s missing key innovation windows.”
Apple’s board signed off on a $100bn buyback programme and raised its dividend by 4 per cent, in line with prior years.
This is a sign the company is leaning on financial engineering to prop up shareholder returns amid strategic uncertainty.
Cautious optimism for the road ahead
Apple’s performance highlights its continued dominance in hardware, yet also the limitations of an ecosystem now facing strategic strain.
Its brand remains powerful, but innovation has stalled, and rivals are moving faster in AI and software differentiation.
As tariffs loom, AI delays persist, and production shifts eastward, Apple’s next chapter will depend not just on product quality – but on political navigation, supply chain agility, and whether it can still surprise a saturated market.