Apple blew past revenue targets with $109 billion in sales, but just hours later supply shortages sent the stock sliding. Is this what the panic is all about?
Apple just pulled off its biggest June quarter in company history. Consumers snapped up iPhones and Macs despite rising prices across the tech sector, driving total revenue to $109.4 billion- up 16% from last year.
iPhone sales jumped 22% to $54.2 billion, setting a summer record. Mac sales surged 29% to $10.4 billion- propelled by strong demand for new MacBooks. Meanwhile, profits hit $2.02 per share- topping Wall Street expectations.
The traders still immediately dumped the stock, with shares decreasing 6% in after-hours trading.
Why the sudden panic?
Wall Street fixated on supply chain bottlenecks. Outgoing CEO Tim Cook warned that global memory chip shortages are throttling production. Because Apple cannot build devices fast enough to meet demand, CFO Kevan Parekh projected 9% to 11% growth for next quarter- slightly below Wall Street’s 12% estimate.
Punishing a company for selling products faster than factories can produce them misses the mark. Apple’s real story isn’t a weak forecast. It is relentless consumer demand. Buyers are upgrading devices even as economic headwinds force price increases elsewhere.
This quarter also marked Tim Cook’s final earnings call as CEO before handing leadership to John Ternus. Cook leaves Apple with a record 2.5 billion active devices and $30.7 billion in quarterly Services revenue.
Short-term supply shortages will clear up, but Apple’s massive market dominance isn’t going anywhere.
