Apple Earnings Focus: How Do GS & MS Expect This Quarter?
$Apple(AAPL)$ earnings is due at the end of this month, overlapping almost perfectly with the CEO transition news. Major banks’ latest research points to two key conclusions:
Why it could beat: iPhone and Mac are both stronger than expected
Goldman Sachs forecasts iPhone revenue of $56.6 billion this quarter, up 21% year over year, slightly above the market consensus of 19%. The drivers are:
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17% higher average selling prices, thanks to the iPhone 17 Pro series removing the 128GB base option and introducing a 2TB storage option
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A strong rebound in China market share, which rose 33% YoY in Q1, even as the broader smartphone market fell 3%
The Mac business is also expected to grow 12% YoY, with MacBook Neo delivery times stretching to 18.5 days, a clear sign of supply-demand tightness.
Goldman expects EPS of $2.00 this quarter, above the market consensus of $1.93.
Morgan Stanley has also raised its forecasts, arguing that the strength in iPhone and Mac is enough to offset margin pressure and could provide the market with a “clear upside surprise moment.”
The biggest risk: memory costs may eat the margin?
This is the risk both major banks explicitly highlighted.
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DRAM prices are up 120% YoY
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NAND prices are up 65% YoY
By 2026, memory costs are expected to rise from about 11% of iPhone bill-of-materials costs to 15.4%, almost doubling.
This is a very real pressure on margins. Morgan Stanley expects Apple’s June-quarter gross margin to come in about 150 basis points below market consensus.
The key question is: Will Apple pass on these costs through higher prices, or absorb the pressure to protect market share?
The answer will directly determine Apple’s FY2027 earnings power.
Let’s look at long-term catalysts: WWDC + iPhone Fold
Major banks generally believe the market is underestimating two catalysts in the second half of the year:
June 8 WWDC
Apple’s Worldwide Developers Conference is expected to unveil a redesigned Siri and upgrades to the Apple Intelligence platform.
Morgan Stanley points out that investor expectations for this WWDC are almost zero. If Apple delivers a credible AI product, it could trigger a move similar to the 6x valuation expansion after WWDC 2024.
Fall Launch of iPhone Fold
Apple’s first foldable iPhone.
Goldman believes this could be “the most innovative iPhone lineup in Apple’s history.” Whether it can spark a major upgrade cycle will be the most important metric to watch in 2H 2026.
Historical data also supports this view: Morgan Stanley’s research shows that in the 3–6 months before an iPhone launch, Apple stock has historically outperformed the S&P 500 by about 10–15 percentage points on average.
In addition, $Apple(AAPL)$ is relatively cheaper than mag 5. if we look at its P/FCF.
Discussion
With earnings season overlapping with a CEO transition, how do you view Apple’s next move?
iPhone memory costs surge, will Apple choose to raise prices or absorb the margin hit?
Which option do you think would be more stock-friendly?
How do you expect Apple's upcoming earnings?
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真正的变量，其实在后面：WWDC的AI进展，以及折叠iPhone。如果AI能带来新的使用场景，加上硬件创新触发换机周期，那利润压力是可以被收入增长覆盖的。
On memory costs, I lean toward Apple passing through part of the increase rather than fully absorbing it. DRAM and NAND inflation is too large to ignore, and absorbing it would hurt long-term earnings power. Modest price increases with stable demand would actually be more bullish, as it reinforces pricing power.
Overall, I’m cautiously positive but not expecting a breakout. The real catalysts are WWDC and AI/Siri progress, plus the iPhone Fold cycle in 2026. If Apple avoids a margin shock and shows incremental AI progress, I’d view this as a stabilisation quarter rather than a peak moment.
@Tiger_Earnings @TigerStars @Tiger_comments @TigerClub
Memory cost surge: Likely hybrid response
Small price increases (premium tiers)
Partial margin absorption
Most stock-friendly:
Protect margins > protect volume. Markets prefer stable profitability over aggressive pricing restraint.
Earnings outlook:
Likely inline / slight beat
Guidance is key
Watch:
Gross margins (cost pressure)
China demand commentary
AI direction under new leadership
Bottom line:
Apple needs confidence, not surprise. Weak guidance will outweigh any beat.