Apple will reveal its latest earnings this Thursday, and the stakes are high. Wall Street expects the tech giant to report a massive $138.5 billion in revenue for the quarter that ended in December. This period covers the first full wave of iPhone 17 sales, and Apple previously told investors to expect a growth rate of at least 10% thanks to holiday shoppers.
While the new iPhone appears to be a hit, investors are acting cautious. Apple’s stock has actually dropped about 11% since early December. Shareholders worry about the “hidden” costs created by the current AI boom. Specifically, the prices for memory and storage chips have skyrocketed. Because every major tech company is currently fighting for the same hardware to power their AI systems, Apple now has to pay much more for the parts that go into its phones, tablets, and Macs.
Last October, Apple’s finance chief downplayed these rising costs, but analysts aren’t so sure. Some experts believe Wall Street hasn’t fully realized how much these expensive components will eat into Apple’s profits throughout 2026.
Beyond the raw numbers, everyone wants to hear about the company’s AI strategy. Apple made waves recently by picking Google’s Gemini to run parts of its “Apple Intelligence” software, replacing some of its own internal models. CEO Tim Cook will likely use the call to hype up a new, “more personal” version of Siri scheduled for later this year.
However, the road to making money from AI looks bumpy. Some analysts warn that consumers might not yet see a clear reason to upgrade just for AI features. If the hardware parts keep getting more expensive and the AI tools don’t bring in new cash quickly, Apple’s predicted “growth cycle” could face a reality check. Cook must now convince the market that Apple can navigate these high costs while staying at the top of the food chain.
