Tim Cook, chief executive officer of Apple Inc., center, greets a shopper at the company’s Fifth Avenue store in New York, US, on Friday, Sept. 22, 2023.
Gabby Jones | Bloomberg | Getty Images
Apple is expected to post its fourth consecutive quarterly revenue decline when it reports earnings after the bell Thursday. Wall Street expects $89.28 billion in sales, which would mark about a 1% fall from the same quarter last year.
Apple stock is up about 32.5% so far this year, partially due to the perception of Apple as a fortress-like company with strong cash flow, popular products, and a globally-known brand. But analysts haven’t missed Apple’s lack of growth this year and want to see revenue increasing again.
They’ll want to hear about how the current quarter, which is usually its largest thanks to the holiday shopping season, is shaking out. Apple hasn’t given official guidance since 2020, but CFO Luca Maestri often gives a few data points on a call with analysts that point to where Apple thinks it is headed. They will also be paying close attention to any clues about how demand for the iPhone 15 lineup is faring.
The September quarter isn’t Apple’s biggest or slowest quarter of the year and only includes about a week or so of iPhone 15 sales. The December quarter is Apple’s biggest of the year by revenue — right now, analysts expect $122.97 billion in sales, or 5% growth, even versus a quarter last year that included an extra week because of fiscal calendars.
Apple’s fiscal fourth quarter period typically includes a little bit of back-to-school laptop and tablet spending benefitting its Mac and iPad divisions. But Apple warned in August that it expected Mac and iPad revenue to decline by “double digit” percentages, blaming difficult comparisons to a good quarter in 2022 when sales popped after prior supply issues.
The mood among analysts, especially in regard to expectations for the fourth quarter, is changing.
Morgan Stanley analyst Erik Woodring says that there are four forces working against Apple in the December quarter: An unfavorable comparison, a strong dollar, iPhone supply issues, and a cautious consumer.
“Sentiment has turned more challenging for shares of Apple in recent days with increasing concerns around the lower demand for the iPhone 15 Series in China, as well as lackluster consumer spending momentum globally,” wrote JPMorgan analyst Samik Chatterjee earlier this week in a note to investors.
China
Hundreds of people lined up at a flagship Apple store in Beijing to pick up the new iPhone 15 when deliveries began on Friday.
CNBC | Evelyn Cheng
One data point from a market research firm tracking smartphone sales suggested that iPhone 15 sales started off slow in China this year.Wall Street analysts who cover Apple worry that renewed competition from Huawei in China could be making the iPhone less competitive in the company’s third-largest market. It could show up in Apple’s future guidance.
“Apple does have a China problem. I think when it comes to the phone, my sense is it’s going to be soft in China for the Sept. quarter,” Deepwater Asset Management founder Gene Munster said on CNBC earlier this week.
There’s some disagreement among analysts whether the Huawei competition is a temporary or permanent factor for Apple.
“Importantly, we believe the data suggests increased competition from Huawei in China is likely to be a headwind next year,” Oppenheimer analyst Martin Yang wrote in a note last month.
Some reviews of this year’s new premium Huawei device suggest it is technologically inferior.
“We expect Huawei-related pressure on iPhone to be temporary and moderate into FY24 due to significantly outdated chipset on the Mate 60 series,” wrote Oppenheimer analyst Martin Yang.
During the quarter, the Wall Street Journal reported on new efforts from the Chinese government to ban foreign technology from government agencies, which many saw as a signal about the company’s changing fortunes in the region and raised the possibility that national pride or future government regulations could push Chinese consumers away from Apple.
“With Huawei’s unexpected launch of Mate 60 Pro and Chinese government’s ban of using foreign phones for government workers, iPhone market share in China has been a big concern for investors,” wrote Citi analyst Atif Malik.
Global iPhone sales
In other regions, investors want to know if the iPhone 15 is selling like hotcakes, or if it’s not moving off store shelves as fast as previous years. Analysts call the strength of any given year’s iPhone sales the “cycle.”
Apple launched new iPhones in September with a lighter, redesigned titanium body, a longer telephoto lens, and a USB-C charging port.
“We are in the camp that [iPhone 15] is not a good cycle on demand weakness and elongation of replacement cycles,” Barclays analyst Tim Long wrote.
While analysts track ship times on Apple’s website and third-party estimates for iPhone sales, there’s no substitute for color from Apple CEO Tim Cook or sales numbers, either from the week or so the iPhone 15 was on sale in September or through its unofficial guidance for the December quarter.
Another factor is that some analysts are pointing to supply constraints on some iPhones, particularly the higher-end and more expensive “Pro” models which could push some sales out of the December quarter and into the January quarter.
“However, we are more cautious on the December quarter given iPhone supply shortages and uneven consumer spending, and believe Apple will guide to a revenue range that is both below normal seasonality and consensus expectations,” wrote Woodring, the Morgan Stanley analyst.
Estimates, the Mac, and Services
One business line that is expected to be in rough shape this quarter is Apple’s Mac business. Analysts expect $8.5 billion in sales, which would be a 26% drop from last year. Apple executives could focus on the fact it just released new MacBooks with chips on Oct. 30 with new chips to stoke more interest, analysts say.
One bright spot is expected to be Apple’s services business, even as the Google trial in Washington DC highlights how much of that is from Google paying Apple to be the default search engine on iPhones, and puts that reportedly $19 billion per year deal at risk over antitrust. Apple is expected to report $21.42 billion in services revenue, offsetting some weak hardware revenue, and which would be an 11% year-over-year increase.
Here’s what Wall Street is expecting, per LSEG, formerly Refinitiv, estimates:
Revenue: $89.28 billion
EPS: $1.39
Here’s what to expect from the company’s product lines, per Street Account estimates:
Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.
Kevin Dietsch | Getty Images
At Tesla, vehicle sales are slumping, profits are thinning and revenue from regulatory credit sales are poised to dry up due to Republican-led policy changes.
In the past, CEO Elon Musk’s futuristic promises have convinced investors to look past top and bottom line numbers.
Not now.
Following another fairly dismal earnings report this week, Musk told analysts on the call that Tesla’s electric vehicles will soon become driverless, making money for owners while they sleep. He also said Tesla’s robotaxi service, which the company recently started testing in a limited capacity in Austin, Texas, will expand to other states, with a goal of being able to reach half the U.S. population by year-end, “assuming we have regulatory approvals.”
It didn’t matter.
Tesla shares plummeted 8% on Thursday as investors focused on the immediate challenges facing the company, including the rapid rise of lower-cost EV competitors, particularly in China, and a political backlash against Musk that harmed Tesla’s brand in the U.S. and Europe.
Automotive sales declined 16% year-over-year in the second quarter for the EV maker, with weak sales numbers continuing in Europe and California. Musk said there could be a “few rough quarters” ahead because of the EV credits expiring and President Donald Trump’s tariffs.
The stock bounced back some on Friday, gaining 3.5%, but still ended the week down and has now fallen 22% this year, the worst performance among tech’s megacaps. The Nasdaq rose 1% for the week and is up more than 9% in 2025, closing at a record on Friday.
“Look, we love robotaxis. And robots,” wrote analysts at Canaccord Genuity, who recommend buying Tesla’s stock, in a note after the earnings report. “Over time, Tesla is well positioned to benefit from these future-forward opportunities.”
The analysts, however, said that they’re focused on the profit and loss statement, writing: “But we love growth too, in the here and now. We need the P&L dynamics to turn.”
Analysts at Jefferies described the earnings update as “a bit dull.” And Goldman Sachs said Tesla’s robotaxi effort is “still small” with limited technical data points.
Tesla didn’t respond to a request for comment.
Musk, who has previously called himself “pathologically optimistic,” has been able to sway shareholders and send the stock soaring at times with promises of self-driving cars, humanoid robots and more affordable EVs.
But after a decade of missed self-imposed deadlines on autonomous driving, Wall Street is watching Tesla fall behind Alphabet’s Waymo in the U.S. and Baidu’s Apollo Go in China.
In Tesla’s shareholder deck, the company said the second quarter marked the start of its “transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services.” The company didn’t offer any new guidance for growth or profits for the year ahead.
Regulatory hurdles
Business Insider reported on Friday that Tesla told staff its robotaxi service could launch in the San Francisco Bay Area as soon as this weekend.
But Tesla hasn’t applied for permits that would be required to run a driverless ridehailing service in California, CNBC confirmed. The company would first need authorizations from the state’s Department of Motor Vehicles and the California Public Utilities Commission (CPUC).
The CPUC told CNBC on Friday, that under existing permits, Tesla can only operate a human-driven chartered vehicle service, not carry passengers in robotaxis.
Waymo driverless vehicles wait at a traffic light in Santa Monica, California, on May 30, 2025.
Daniel Cole | Reuters
On the earnings call, Musk and other Tesla execs claimed the company was working on regulatory approvals to launch in Nevada, Arizona, Florida and other markets, in addition to San Francisco, but offered no details about what would be required.
Within Austin, the company said its robotaxi service had driven 7,000 miles, and that Tesla has been restricting its robotaxis’ to roads with a speed limit of 40 miles per hour. The Austin service involves a small fleet of about 10 to 20 Model Y vehicles equipped with the company’s latest self-driving systems.
The Tesla robotaxis rely on remote supervision by employees in a customer service center, and a human safety supervisor in the front passenger seat, ready to intervene if needed.
Compare that to what Alphabet said on its second-quarter earnings call the same day as Tesla’s results.
“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,” Alphabet said. Meanwhile, Waymo has become significant enough that Alphabet 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, with revenue coming in at $373 million in the quarter.
Regardless of investor skepticism, Musk is more bullish than ever.
On Friday, the world’s richest person posted on his social network X that he thinks Tesla will someday be worth $20 trillion. On the earnings call earlier in the week, he said that when it comes to AI for cars and robots, “Tesla is actually much better than Google by far” and “much better than anyone at real world AI.”
CORRECTION: The Waymo Driver has now autonomously driven over 100 million miles on public roads, according to Alphabet. A previous version misstated the number of miles.
A vehicle Tesla is using for robotaxi testing purposes on Oltorf Street in Austin, Texas, US, on Sunday, June 22, 2025.
Tim Goessman | Bloomberg | Getty Images
In an earnings call this week, Tesla CEO Elon Musk teased an expansion of his company’s fledgling robotaxi service to the San Francisco Bay Area and other U.S. markets.
But California regulators are making clear that Tesla is not authorized to carry passengers on public roads in autonomous vehicles and would require a human driver in control at all times.
“Tesla is not allowed to test or transport the public (paid or unpaid) in an AV with or without a driver,” the California Public Utilities Commission told CNBC in an email on Friday. “Tesla is allowed to transport the public (paid or unpaid) in a non-AV, which, of course, would have a driver.”
In other words, Tesla’s service in the state will have to be more taxi than robot.
Tesla has what’s known in California as a charter-party carrier permit, which allows it to run a private car service with human drivers, similar to limousine companies or sightseeing services.
The commission said it received a notification from Tesla on Thursday that the company plans to “extend operations” under its permit to “offer service to friends and family of employees and to select members of the public,” across much of the Bay Area.
But under Tesla’s permit, that service can only be with non-AVs, the CPUC said.
The California Department of Motor Vehicles told CNBC that Tesla has had a “drivered testing permit” since 2014, allowing the company to operate AVs with a safety driver present, but not to collect fees. The safety drivers must be Tesla employees, contractors or designees of the manufacturer under that permit, the DMV said.
In Austin, Texas, Tesla is currently testing out a robotaxi service, using its Model Y SUVs equipped with the company’s latest automated driving software and hardware. The limited service operates during daylight hours and in good weather, on roads with a speed limit of 40 miles per hour.
Robotaxis in Austin are remotely supervised by Tesla employees, and include a human safety supervisor in the front passenger seat. The service is now limited to invited users, who agree to the terms of Tesla’s “early access program.”
On Friday, Business Insider, citing an internal Tesla memo, reported that Tesla told staff it planned to expand its robotaxi service to the San Francisco Bay Area this weekend. Tesla didn’t respond to a request for comment on that report.
In a separate matter in California, the DMV has accused Tesla of misleading consumers about the capabilities of its driver assistance systems, previously marketed under the names Autopilot and Full Self-Driving (or FSD).
Tesla now calls its premium driver assistance features, “FSD Supervised.” In owners manuals, Tesla says Autopilot and FSD Supervised are “hands on” systems, requiring a driver at the wheel, ready to steer or brake at all times.
But in user-generated videos shared by Tesla on X, the company shows customers using FSD hands-free while engaged in other tasks. The DMV is arguing that Tesla’s license to sell vehicles in California should be suspended, with arguments ongoing through Friday at the state’s Office of Administrative Hearings in Oakland.
Under California state law, autonomous taxi services are regulated at the state level. Some city and county officials said on Friday that they were out of the loop regarding a potential Tesla service in the state.
Stephanie Moulton-Peters, a member of the Marin County Board of Supervisors, said in a phone interview that she had not heard from Tesla about its plans. She urged the company to be more transparent.
“I certainly expect they will tell us and I think it’s a good business practice to do that,” she said.
Moulton-Peters said she was undecided on robotaxis generally and wasn’t sure how Marin County, located north of San Francisco, would react to Tesla’s service.
“The news of change coming always has mixed results in the community,” she said.
Brian Colbert, another member of the Marin County Board of Supervisors, said in an interview that he’s open to the idea of Tesla’s service being a good thing but that he was disappointed in the lack of communication.
“They should have done a better job about informing the community about the launch,” he said.
Alphabet’s Waymo, which is far ahead of Tesla in the robotaxi market, obtained a number of permits from the DMV and CPUC before starting its driverless ride-hailing service in the state.
Waymo was granted a CPUC driverless deployment permit in 2023, allowing it to charge for rides in the state. The company has been seeking amendments to both its DMV and CPUC driverless deployment permits as it expands its service territory in the state.
Meta CEO Mark Zuckerberg makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta CEO Mark Zuckerberg on Friday said Shengjia Zhao, the co-creator of OpenAI’s ChatGPT, will serve as the chief scientist of Meta Superintelligence Labs.
Zuckerberg has been on a multibillion-dollar artificial intelligence hiring blitz in recent weeks, highlighted by a $14 billion investment in Scale AI. In June, Zuckerberg announced a new organization called Meta Superintelligence Labs that’s made up of top AI researchers and engineers.
Zhao’s name was listed among other new hires in the June memo, but Zuckerberg said Friday that Zhao co-founded the lab and “has been our lead scientist from day one.” Zhao will work directly with Zuckerberg and Alexandr Wang, the former CEO of Scale AI who is acting as Meta’s chief AI officer.
“Shengjia has already pioneered several breakthroughs including a new scaling paradigm and distinguished himself as a leader in the field,” Zuckerberg wrote in a social media post. “I’m looking forward to working closely with him to advance his scientific vision.”
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In addition to co-creating ChatGPT, Zhao helped build OpenAI’s GPT-4, mini models, 4.1 and o3, and he previously led synthetic data at OpenAI, according to Zuckerberg’s June memo.
Meta Superintelligence Labs will be where employees work on foundation models such as the open-source Llama family of AI models, products and Fundamental Artificial Intelligence Research projects.
The social media company will invest “hundreds of billions of dollars” into AI compute infrastructure, Zuckerberg said earlier this month.
“The next few years are going to be very exciting!” Zuckerberg wrote Friday.