Tim Cook arrives at Sun Valley’s Allen & Company meeting in Sun Valley, Idaho.
David A. Grogan | CNBC
Apple is expected to post its third consecutive quarterly revenue decline when it reports earnings after the bell Thursday. Wall Street expects $81.7 billion in sales, which would be down about 2.3% from last year.
Apple’s stock is up over 51% so far in 2023, hitting all-time highs. Investors see it as a safe haven with strong cash flow, despite worries about slowing demand for consumer goods, including PCs and smartphones.
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Analysts will also want to hear about how the current quarter, which ends in September, is shaking out. Apple hasn’t given guidance since 2020, citing uncertainty, but it provides investors with some data points that they can use to determine whether Apple sees overall sales growing or shrinking.
The company’s forecast will be more important. It may give clues as to whether global economies are set up for a “soft landing” after two years of interest rate hikes.
The June period is typically Apple’s slowest quarter of the year, while its fourth fiscal quarter often captures back-to-school laptop spending, a few days of new iPhone model sales — which usually come out in September — and shows Apple’s momentum heading into the holiday season.
“What will matter most will be management’s September quarter,” wrote Morgan Stanley analyst Erik Woodring in July, adding that he expects Apple to guide to year-over-year revenue growth again.
Emerging markets and China
Some analysts are eager to see Apple give data points on India sales. Apple CEO Tim Cook traveled to the country in April and spoke about hopes for significant growth in the region. India became one of Apple’s top five iPhone markets during the quarter, according to analyst estimates.
“On the call, we look for additional details on its expansion in India, including its retail and manufacturing presence,” D.A. Davidson analyst Tom Forte wrote this week.
But Apple’s older growth driver, China, is likely to be closely watched as well. Greater China — including Hong Kong and Taiwan — is Apple’s third-largest sales region, and it has reported two straight quarters of revenue decline, even as the region reopened after years of strict Covid lockdowns.
“In our conversations, most investors feel that a soft China could pose a risk to the numbers and further commentary, but we feel that Apple’s position in China is on a solid footing and that the company is likely to see only a small if any decline in its iPhone sales,” wrote Piper Sandler analyst Harsh Kumar.
Kumar said if China ends up being weak, it could be offset by strong sales momentum in India.
Apple mainly manufactures in China and investors will want to hear that the company has overcome many of the supply chain snags that have hampered sales over the past two years. If Apple stockpiled parts and has enough to make what it needs to produce, it could help margins, analysts say.
Services growth and A.I. acceleration
Apple’s profitable services division includes monthly subscriptions such as Apple Music, warranties under AppleCare, fees from the App Store, advertising revenue from search licensing agreements with Google, payments from Apple Pay and other products.
Wall Street likes to see Apple’s services business grow regularly and smoothly, because the margins on services are so much higher than when Apple sells hardware. In particular, many analysts want to see services reaccelerate after a few quarters of weak growth because of lagging App Store software sales.
Apple suggested a 5% year-over-year increase in services, and FactSet’s estimates more than $20.7 billion in revenue. But analysts will want to see Apple signal more growth than that.
“For the Services business, we expect year-over-year revenue growth to accelerate from the +5% level expected in [fiscal third quarter,] with our checks suggesting online advertising has improved,” Deutsche Bank analyst Sidney Ho wrote.
Analysts will also likely ask about artificial intelligence, given the industrywide obsession with the technology and a recent Bloomberg report that Apple is developing a ChatGPT-like AI model internally. Don’t expect Apple to gush about what it’s working on internally, though.
“With the official intro of Vision Pro, we expect Apple’s updated comments on its AI aspirations to be a focus (albeit likely very high-level),” wrote Wells Fargo analyst Aaron Rakers.
Estimates
Apple reports its results by product line, which can give investors a look into which businesses are thriving and which ones are in a down cycle.
IPhone, iPad and Mac sales are all expected to be down on an annual basis, with iPad sales projected to drop nearly 11%, according to FactSet estimates. Wearables, the product category with headphones and Apple Watch — and what will likely be the reporting category for Vision Pro when it goes on sale — is projected to decline less than 1%.
However, analysts expect Apple’s services business to grow 5.2% on an annual basis, which would be a bright spot for the report.
Here’s what Wall Street is expecting, per FactSet estimates:
Revenue: $81.7 billion
EPS: $1.19 per share
Here’s what to expect from the company’s product lines, per FactSet estimates:
Data storage tapes are stored at the National Energy Research Scientific Computing Center (NERSC) facility at the Lawrence Berkeley National Laboratory, which will house the U.S. supercomputer to be powered by Nvidia’s forthcoming Vera Rubin chips, in Berkeley, California, U.S. May 29, 2025.
Manuel Orbegozo | Reuters
Europe is setting its sights on gigawatt factories in a bid to bolster its lagging artificial intelligence industry and meet the challenges of a rapidly-changing sector.
Buzz around the concept of factories that industrialize manufacturing AI has gained ground in recent months, particularly as Nvidia CEO Jensen Huang stressed the importance of the infrastructure at a June event. Huang hailed a new “industrial revolution” at the GTC conference in Paris, France, and said his firm was working to help countries build revenue-generating AI factories through partnerships in France, Italy and the U.K.
For its part, the European Union describes the factories as a “dynamic ecosystem” that brings together computing power, data and talent to create AI models and applications.
The bloc has long been a laggard behind the U.S. and China in the race to scale up artificial intelligence. With 27 members in the union, the region is slower to act when it comes to agreeing new legislation. Higher energy costs, permitting delays and a grid in dire need of modernization can also hamper developments.
Henna Virkkunen, the European Commission’s executive vice president for tech sovereignty, told CNBC that the bloc’s goal is to bring together high quality data sets, computing capacity and researchers, all in one place.
“We have, for example, 30% more researchers per capita than the U.S. has, focused on AI. Also we have around 7,000 startups [that] are developing AI, but the main obstacle for them is that they have very limited computing capacity. And that’s why we decided that, together with our member states, we are investing in this very crucial infrastructure,” she said.
These are very big investments because they are four times more powerful when it comes to computing capacities than the biggest AI factories.
Henna Virkkunen
European Commission’s executive vice president for tech sovereignty
“We have everything what is needed to be competitive in this sector, but at the same time we want to build up our technological sovereignty and our competitiveness.”
So far, the EU has put up 10 billion euros ($11.8 billion) in funding to set up 13 AI factories and 20 billion euros as a starting point for investment in the gigafactories, marking what it says is the “largest public investment in AI in the world.” The bloc has already received 76 expressions of interest in the gigafactories from 16 member states across 60 sites, Virkkunen said.
The call for interest in gigafactories was “overwhelming,” going far beyond the bloc’s expectations, Virkkunen noted. However, in order for the factories to make a noteworthy addition to Europe’s computing capacity, significantly more investment will be required from the private sector to fund the expensive infrastructure.
‘Intelligence revolution’
The EU describes the facilities as a “one-stop shop” for AI firms. They’re intended to mirror the process carried out in industrial factories, which transform raw materials into goods and services. With an AI factory, raw data goes into the input, and advanced AI products are the expected outcome.
It’s essentially a data center with additional infrastructure related to how the technology will be adopted, according to Andre Kukhnin, equity research analyst at UBS.
“The idea is to create GPU [graphics processing units] capacity, so to basically build data centers with GPUs that can train models and run inference… and then to create an infrastructure that allows you to make this accessible to SMEs and parties that would not be able to just go and build their own,” Kukhnin said.
How the facility will be used is key to its designation as an AI factory, adds Martin Wilkie, research analyst at Citi.
“You’re creating a platform by having these chips that have insane levels of compute capacity,” he said. “And if you’ve attached it to a grid that is able to get the power to actually use them to full capacity, then the world is at your feet. You have this enormous ability to do something, but what the success of it is, will be defined by what you use it for.”
Telecommunications firm Telenor is already exploring possible use cases for such facilities with the launch of its AI factory in Norway in November last year. The company currently has a small cluster of GPUs up and running, as it looks to test the market before scaling up.
Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen and EVP Infrastructure Jannicke Hilland in front of a Nvidia rack at the firm’s AI factory
Telenor
“The journey started with a belief — Nvidia had a belief that every country needs to produce its own intelligence,” Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen told CNBC.
Hilsen stressed that data sovereignty is key. “If you want to use AI to innovate and to make business more efficient, then you’re potentially putting business critical and business sensitive information into these AI models,” she said.
The company is working with BabelSpeak, which Hilsen described as a Norwegian version of ChatGPT. The technology translates sensitive dialogues, such as its pilot with the border police who can’t use public translation services because of security issues.
We’re experiencing an “intelligence revolution” whereby “sovereign AI factories can really help advance society,” Hilsen said.
Billion-euro investments
Virkkunen said the region’s first AI factory will be operational in coming weeks, with one of the biggest projects launching in Munich, Germany in the first days of September. It’s a different story for the gigafactories.
“These are very big investments because they are four times more powerful when it comes to computing capacities than the biggest AI factories, and it means billions in investments. Each of these need three to five billion [euros] in investment,” the commissioner said, adding that the bloc will look to set up a consortium of partners and then officially open a call for investment later this year.
Bertin Martens, senior research fellow at Bruegel, questioned why such investments needed to subsidized by government funds.
“We don’t know yet how much private investment has been proposed as a complement to the taxpayer subsidy, and what capacity and how big these factories are. This is still very much unclear at this stage, so it’s very hard to say how much this will add in terms of computing capacity,” he said.
Power consumption is also a key issue. Martens noted that building an AI gigafactory may take one to two years — but building a power generation of that size requires much more time.
“If you want to build a state-of-the-art gigafactory with hundreds of thousands of Nvidia chips, you have to count on the power consumption of at least one gigawatt for one of those factories. Whether there’s enough space in Europe’s electricity grid in all of these countries to create those factories remains to be seen… this will require major investment in power regeneration capacity,” he told CNBC.
UBS forecasts that thecurrent installed global data center capacity of 85 GW will double due to soaring demand. Based on the EU’s 20-billion-euro investment and the plan for each factory to run 100,000 advanced processors, UBS estimates each factory could be around 100-150 MW with a total capacity for all of the facilities of around 1.5-2 GW.
That could add around 15% to Europe’s total capacity — a sizeable boost, even when compared to the U.S., which currently owns around a third of global capacity, according to the data.
Following the announcement of the EU-U.S. trade framework, EU chief Ursula von der Leyen said Sunday that U.S. AI chips will help power the bloc’s AI gigafactories in a bid to help the States “maintain their technological edge.”
“One could argue that it’s relatively easy, provided you have the money. It’s relatively easy to buy the chips from Nvidia and to create these hardware factories, but to make it run and to make it economically viable is a completely different question,” Martens told CNBC.
He said that the EU will likely have to start at a smaller scale, as the region is unable to immediately build its own frontier models in AI because of their expense.
“I think in time, Europe can gradually build up its infrastructure and its business models around AI to reach that stage, but that will not happen immediately,” Martens said.
Workers assemble smartphones at Dixon Technologies’ Padget Electronics Pvt factory in Uttar Pradesh, India, on Jan. 28, 2021.
Bloomberg | Bloomberg | Getty Images
India has overtaken China to become the top exporter of smartphones to the U.S., according to research firm Canalys,reflectingthe shift in manufacturing supply chain away from Beijing amid tariff-fueled uncertainty.
Smartphones assembled in India accounted for 44% of U.S. imports of those devices in the second quarter, a significant increase from just 13% in the same period last year. Total volume of smartphones made in India soared 240% from a year earlier, Canalys said.
In contrast, the share of Chinese smartphone exports to the U.S. shrank to 25% in the quarter ended June, from 61% a year earlier, Canalys data released Monday showed. Vietnam’s share of smartphone exports to the U.S. was also higher than that of China at 30%.
The surge in shipments from India was primarily driven by Apple‘s accelerated shift toward the country at a time of heightened trade uncertainty between the U.S. and China, said Sanyam Chaurasia, principal analyst at Canalys. This is the first time India exported more smartphones to the U.S. than China.
Trump has threatened Apple with additional tariffs and urged the company’s CEO Tim Cook to make iPhones domestically, a move experts have said would be nearly impossible as it would push iPhone prices higher.
While many of Apple’s core products, including iPhones and Mac laptops, have received exemptions from Trump’s “reciprocal tariffs,” officials have warned that it could be a temporary reprieve.
Its global peers, Samsung Electronic and Motorola, have also been striving to move assembly for U.S.-bound smartphones to India, though their shift has been significantly slower and is limited in scale compared with Apple, according to Canalys.
Last-mile assembly
Many global manufacturers have been increasingly shifting their final assembly to India, allocating more capacity in the South-Asian nation to serve the U.S. market, said Renauld Anjoran, CEO of Agilian Technology, an electronics manufacturer in China.
The Guangdong-based company is now renovating a facility in India with plans to move part of its production to the country. “The plan for India is moving ahead as fast as we can,” Anjoran said. The company expects to begin trial production runs soon before ramping up to full-scale manufacturing.
While shipments, which represent the number of devices sent to retailers do not reflect final sales, they are a proxy for market demand.
Overall, iPhone shipments declined by 11% year on year to 13.3 million units in the second quarter, reversing the 25% growth in the prior quarter, according to Canalys.
Shares of Apple have tumbled 14% this year, partly on concerns over its high exposure to tariff uncertainty and intensifying competition in smartphones and artificial intelligence sector.
While the company has begun assembling iPhone 16 Pro models in India, it still relies heavily on China’s more mature manufacturing infrastructure to meet U.S. demand for the premium model, Canalys said.
In April, Trump imposed a 26% tariff on imports from India, much lower than the triple-digit tariffs on China at the time, before pausing those duties until an Aug 1. deadline.
A Waymo rider-only robotaxi is seen during a test ride in San Francisco, California, U.S., December 9, 2022.
Paresh Dave | Reuters
Alphabet’s Waymo unit plans on bringing its robotaxi service to Dallas next year, adding to a growing list of prospective U.S. markets for 2026, including Miami and Washington, D.C.
Rental car company Avis Budget Group will be managing the Waymo fleet in Dallas, via a new partnership the companies announced Monday.
Avis CEO Brian Choi said in a statement that the agreement marks a “milestone” for the company, which is now also working to become “a leading provider of fleet management, infrastructure and operations to the broader mobility ecosystem.”
Waymo robotaxi testing is already underway in downtown Dallas involving the company’s Jaguar I-PACE electric vehicles with the Waymo Driver system. That combines automated driving software, sensors and other hardware that power the vehicles’ “level 4,” driverless operations.
Passengers will be able to hail a driverless ride using the Waymo app in Dallas. In some other markets, Waymo only makes its services available through ride-hailing platform Uber.
Waymo has surged ahead in the robotaxi market while other autonomous vehicle developers, including Tesla, Amazon-owned Zoox, and venture-backed startups such as Nuro, May Mobility and Wayve, are working to make autonomous transportation a commercial reality in the U.S.
Waymo says it conducts more than 250,000 paid weekly trips in the markets where it operates commercially, including Atlanta, Austin, Los Angeles, Phoenix and San Francisco.
Waymo’s steepest competition internationally comes from Baidu’s robotaxi venture Apollo Go in China, which is eyeing expansion in Europe.
On Alphabet’s second-quarter earnings call, execs boasted that, “The Waymo Driver has now autonomously driven over 100 million miles on public roads, and the team is testing across more than 10 cities this year, including New York and Philadelphia.”
The business has become significant enough that Alphabet even added a category to its Other Bets revenue description in its latest quarterly filing.
“Revenues from Other Bets are generated primarily from the sale of autonomous transportation services, healthcare-related services and internet services,” the filing said.
The Other Bets segment remains relatively small, however, with revenue coming in at $373 million in the quarter, up from $365 million a year ago. The division still reported a loss of $1.25 billion, widening from $1.13 billion in the second quarter of 2024.