Apple's June Quarter Revenue Expected to Rise 15.5%, Strongest Growth in Five Years
Taylor Wilson
Apple's fiscal Q3 revenue is projected to grow 15.5% year-on-year to $108.65 billion, its strongest June-quarter pace since 2021; holding iPhone prices flat while rivals raised theirs handed Apple market-share gains, but how long that card can last is the central question ahead.
What drove this surge?
iPhone revenue is expected to jump 20.8% year-on-year, a five-year high for the period and the quarter's main growth engine.
The key: memory and storage chips tightened and costs rose as AI data-center build-outs accelerated. Apple raised prices on iPad and MacBook but held the iPhone at its existing price.
This means → rivals had to pass costs on to consumers. Global smartphone shipments fell to a 13-year low, while Apple's iPhone shipments rose 3% and its market share climbed to nearly one-fifth (Counterpoint Research estimate).
Did profits keep pace?
Net income is forecast to grow 18.1% year-on-year — solid, but gross margin narrowed from 49.3% last quarter to 47.9%.
In plain terms = revenue is running, profits are rising, but each dollar of revenue is keeping slightly less profit than last quarter — holding iPhone prices flat has a cost.
Mac revenue growth accelerated from 5.7% to 8.7% quarter-on-quarter; iPad growth eased from 8% to 5.2%.
The stock is up sharply — what is the market buying?
Apple has gained nearly 25% year-to-date, briefly crossing a $5 trillion market cap — the best performer among the Magnificent Seven.
This reflects a narrative reversal: Apple was initially criticized for not investing heavily in AI data centers. Now investors see that as an advantage — last week Alphabet reported its first-ever negative free cash flow, fueling doubts about AI capex returns.
Synovus Trust portfolio manager Dan Morgan: "Apple was originally criticized for not joining the AI investment cycle — now it's being rewarded for it."
Is an iPhone price hike inevitable?
Dan Morgan expects Apple to raise iPhone prices later this year, which could dampen demand and pressure the current premium valuation.
Analysts broadly expect Apple to begin hiking prices with the new iPhone launch in September; Apple already raised Apple Music and Apple One subscription prices this month.
Morgan Stanley analysts disagree: iPhone has the lowest price elasticity in Apple's lineup — meaning consumers are least sensitive to price increases — so a hike's real impact on demand would be limited.
This means → the timing and magnitude of an iPhone price increase is the key variable for the market's next repricing of Apple's gross-margin outlook — how much and when directly determines whether profits can keep up with revenue growth.
Content is for reference only, not financial advice.