AAPL: Apple Stock Rises as iPhone Sales Drop 1% but AI Hopes Remain High

iPhone maker erased after-hours losses thanks to AI-hopeful traders who expect Apple Intelligence — due this fall — to bump demand for flagship product.

• Apple stock AAPL was modestly higher ahead of Friday’s opening bell following a modest drop that was scooped up by traders. The iPhone maker delivered earnings for the spring quarter that surpassed Wall Street expectations and set the stage for more growth ahead thanks to the power of artificial intelligence. Apple earned $1.40 a share in the June quarter, up 10% from the year-ago’s $1.26.
• Revenue also topped analysts’ views with a 5% jump year-on-year to $85.8 billion, up from $81.8 billion in the same time span last year. Net income logged 8% growth to $21.4 billion from $19.9 billion. It wasn’t all good, though. Sales of iPhones — the company’s flagship product and the driver of about half of all revenue — dropped almost 1% to $39.3 billion. What’s coming next is what saved the share price from a selloff.
• Apple’s AI strategy, Apple Intelligence, is getting jammed into the iPhone with the first releases expected to hit consumers this fall. Investors are hoping that the new AI tools will help drive more sales of the smartphone, especially after the company’s massive spending spree on AI-infused technology. “We think Apple Intelligence will provide yet another compelling reason for customers to upgrade,” said Apple chief financial officer Luca Maestri.