Apple Shares Tumble as Weak Q4 Forecast Overshadows Record Revenue

Apple Inc. (AAPL) shares tumbled 7.3% in pre-market trading to $309.17 after the company's weak fourth-quarter outlook overshadowed a record revenue beat in its fiscal third-quarter earnings report released Thursday evening.

Disappointing Guidance Hits Shares

Despite posting record revenue for its third quarter, Apple shocked investors with a forecast that fell short of analyst estimates. The technology giant projected revenue growth of just 9–11% for the upcoming September quarter.

This guidance implies a midpoint of approximately $113 billion, below the Wall Street consensus of roughly $115 billion. The shortfall is attributed to severe supply constraints for advanced chips, which are expected to limit shipments of the iPhone, Mac, and iPad. Outgoing CEO Tim Cook, on his final earnings call, described the issue as one of underestimating demand, stating, "The root cause of it is not a regular supply issue. It’s a demand forecast issue, to be candid."

Margin Pressures and Segment Misses

Beyond the headline guidance, other details in the report concerned investors. CFO Kevan Parekh noted that gross margins would be squeezed by surging memory costs and a 2.5 percentage point headwind from foreign exchange rates.

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Several key business segments also underperformed against expectations:

• Services Revenue: Came in at $30.74 billion, missing analyst forecasts.
• Greater China Sales: Reached $18.8 billion, also falling short of consensus.
• Earnings Quality: While earnings-per-share of $2.02 beat estimates, the company disclosed that $0.11 of the beat was due to one-time tariff refunds, reducing the perceived quality of the outperformance.

Market Reaction

The selloff in Apple's stock was company-specific, occurring even as the broader market rallied, with the S&P 500 and Nasdaq Composite both trading higher. The decline was further contrasted by a sharp surge in Amazon (AMZN) shares following its own strong earnings, suggesting a rotation by investors toward companies seen as winners in AI infrastructure and away from Apple's near-term hardware constraints.

In response to the report, analysts at JP Morgan lowered their price target on Apple, though they noted that the supply issues would likely defer sales rather than destroy them. The report also comes during a leadership transition, with hardware chief John Ternus set to take over as CEO from Tim Cook on September 1.