Apple was upgraded to a bullish rating after reporting its strongest revenue growth in four years. In Q1 FY26 the company achieved mid‐teen year-over-year revenue growth—the first such result in 16 quarters—driven almost entirely by iPhone 17 sales. Demand surged in Greater China, where iPhone revenue climbed 38%, and accelerated in India, contributing to double-digit growth across all major regions. Despite a 10% increase in memory costs, Apple expanded its gross margin to 48.2%, and management guided to further margin improvement in Q2 based on expected product mix and ongoing cost synergies.

Apple’s ecosystem reached a new milestone with an installed device base exceeding 2.5 billion active units, underpinning continued services growth. In Q1 FY26 services revenue rose 14% year-over-year, driven by App Store, cloud and subscriptions, and delivered a segment gross margin of 76.5%. The growing installed base is expected to support high-margin services and accessories sales in the coming quarters, providing a stable revenue buffer as hardware cycles normalize.

The company signaled it is prioritizing production of its top‐tier iPhone models to maximize profitability amid ongoing supply constraints. Advanced-node system-on-chip availability remains tight, prompting Apple to allocate capacity to premium SKUs and defer mass-market launches. Reports indicate that Apple is planning a foldable iPhone alongside two next-generation premium standard models later in 2026, reflecting a strategic shift toward higher-value devices to offset component cost pressures and drive average selling price gains.