Apple's Earnings Report: Performance Predictable, Focus on New CEO and Gross Margin

Apple will disclose its financial report for the second quarter today, and the market generally anticipates that both revenue and profits will exceed expectations.

However, the market is not entangled in the financial figures, but is looking forward to the strategic direction announced by the newly appointed CEO, John Ternus, in his debut. Additionally, it is worth paying attention to the impact of memory price increases on profit margins.

Apple has officially announced that Cook will transition to Executive Chairman, and John Ternus will officially take over as CEO in September. The personnel announcement was released before the financial report, which is seen as Cook choosing a highlight moment of performance to hand over smoothly.

Institutions predict that Apple's profits and revenue will both achieve double-digit growth this quarter, with the iPhone 17 and Mac new products as the main drivers; surpassing expected revenue has become a market consensus, with gross margin being the real test.

Since August last year, DRAM spot prices have soared by more than 500%, and the cost of iPhone memory per unit has been increasing year by year, becoming Apple's biggest cost pressure. The industry estimates that the iPhone 18 may moderately raise the price by about $50 to offset costs and stabilize the gross margin; at the same time, Apple can reliably compress the cost of other components, and replace Qualcomm with its own research and development of basebands to further offset the pressure of price increases.

Currently, Apple's valuation is significantly higher than the historical average, and its stock price has significantly underperformed the US stock market this year. The market is looking forward to the new CEO bringing innovation and new volume, and Apple's investment in AI is far behind its peers like Google and Meta, and the acceleration of growth still needs to be verified.

JPMorgan maintains an add rating, optimistic about the room for further upward movement, but also points out the uncertainty risks in the management handover.