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:
TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.
Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.
TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.
“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”
Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.
“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.
But there may a dark side to this growth.
As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.
“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”
Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.
“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”
Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.
While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.
Watch the video to understand how TikTok’s rise sparked a short form video race.
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
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Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.