Apple’s China sales in focus ahead of earnings

Published

1 year ago

May 2, 2024

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Apple reports earnings for its second fiscal quarter on Thursday after the markets close.

Investor expectations are low and Apple could surpass them even if sales growth is weak. In February, Apple said it expected sales similar to last year’s $94.84 billion during the same period and flat iPhone sales.

Here’s what analysts expect from Apple, according to LSEG consensus estimates:

Earnings per share: $1.50
Revenue: $90.01 billion

Here’s how Apple’s business units are expected to fare in the March quarter, per LSEG estimates:

iPhone revenue: $46.00billion
Mac revenue: $6.86 billion
iPad revenue: $5.91 billion
Wearables, home and accessories revenue: $8.08 billion
Services revenue: $23.27 billion

Analysts expect Apple to give a forecast for the current quarter of about $83.23 billion in sales, which would be 1.8% annual growth. Apple shares are down about 10% this year, underperforming its peers and the broader market. Some worry that the 2023 iPhone 15 may be seeing weak demand.

But the biggest theme that investors will be watching for is the overall trend in Apple’s third-largest market: China. In the December quarter, sales dropped 13% in Greater China, which includes Hong Kong and Taiwan. Analysts polled by FactSet expect $15.25 billion in China regional sales, which would be a 14% year-over-year decline.

Even worse is what the slump could indicate: Deteriorating conditions in a key market for Apple where it also manufactures the vast majority of its products. Chinese government agencies over the past year have reportedly asked staff to curtail use of “foreign” devices — iPhones — suggesting that Apple may not have the support of Chinese national leadership.

Apple also faces increased competition from local companies, including Huawei, which recently introduced a 5G smartphone despite U.S. export controls on advanced chips.

“AAPL has de-rated significantly amid a weak iPhone 15 cycle and fears that Apple’s China business is structurally impaired,” Bernstein analyst Toni Sacconaghi wrote in a note last week. He has an outperform rating on the stock.

But Sacconaghi doesn’t see Apple being permanently hampered by Chinese Communist Party sentiment, calling the current weak cycle “more cyclical than structural” and pointing out Apple’s historical volatility in the region.

“In strong iPhone cycles, Apple’s China revenues typically grow much faster than Apple overall, as Chinese consumers embrace the new phone,” Sacconaghi wrote. “The strong embrace is typically followed by several quarters of weaker (and often negative YoY growth), as we are seeing now.”

Third-party data points on China aren’t strong, either.

Data from Counterpoint Research shows Huawei surged 70% on an annual basis in March, while Apple declined 19%, falling into third place. However, analysis of the data suggests that the “preliminary signs of iPhone demand improvement … is broader than previously expected,” UBS’ David Vogt wrote this week.

Meanwhile, state statistics show iPhone sales falling 33% in February, the second consecutive month of declining shipments.

Wells Fargo analyst Aaron Rakers said in a March note that iPhone sales could be down 20% on an annual basis during the quarter.

Expectations for the quarter are muted, and how Apple says it sees the current quarter shaping up may be more important than the results for the March quarter.

“There’s a chance Apple could see a relief rally/squeeze higher on a ‘better than feared’ earnings report/guide,” Morgan Stanley analyst Erik Woodring, who has an overweight rating on the stock, wrote in an April note. “This creates a tricky setup, and one we don’t believe investors necessarily need to step in front of.”

Apple hasn’t provided guidance since 2020, but company executives give data points that analysts can use to project sales. “June quarter revenue and gross margin guidance will be critical this quarter,” Woodring wrote.

Apple also typically updates investors during second-quarter earnings about how much it plans to spend on share buybacks for the rest of the year.

“We expect Apple to update its capital return plans at March quarter earnings, and don’t expect any meaningful deviation from recent plans,” Woodring wrote. In May 2023, Apple said it had authorized an additional $90 billion in repurchases.

Technology

Amazon extends Prime Day to four days, starting July 8

Published

6 hours ago

June 17, 2025

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Amazon extends Prime Day to four days, starting July 8

An Amazon worker moves boxes on Amazon Prime Day in the East Village of New York City, July 11, 2023.

Spencer Platt | Getty Images

Amazon is extending its Prime Day discount bonanza, announcing that the annual sale will run four days this year.

The 96-hour event will start at 12:01 a.m. PT on July 8, and continue through July 11, Amazon said in a release.

For the first time, the company will roll out themed “deal drops” that change daily and are available “while supplies last.” Amazon has in recent years toyed with adding more limited-run and invite-only deals during Prime Day events to create a feeling of urgency or scarcity.

Amazon launched Prime Day in 2015 as a way to secure new members for its $139-a-year loyalty program, and to promote its own products and services while providing a sales boost in the middle of the year. In 2019, the company made Prime Day a 48-hour event, and it’s since added a second Prime Day-like event in the fall.

Prime Day is also a significant revenue driver for other retailers, which often host competing discount events.

WATCH: How Amazon is using AI to revolutionize robotics

Technology

SK Hynix shares extend gains to over 2-decade highs as parent group reportedly plans AI data center

Published

9 hours ago

June 17, 2025

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SK Hynix shares extend gains to over 2-decade highs as parent group reportedly plans AI data center

Illustration of the SK Hynix company logo seen displayed on a smartphone screen.

Sopa Images | Lightrocket | Getty Images

Shares in South Korea’s SK Hynix extended gains to hit a more than 2-decade high on Tuesday, following reports over the weekend that SK Group plans to build the country’s largest AI data center.

SK Hynix shares, which have surged almost 50% so far this year on the back of an AI boom, were up nearly 3%, following gains on Monday.

The company’s parent, SK Group, plans to build the AI data center in partnership with Amazon Web Services in Ulsan, according to domestic media. SK Telecom and SK Broadband are reportedly leading the initiative, with support from other affiliates, including SK Hynix.

SK Hynix is a leading supplier of dynamic random access memory or DRAM — a type of semiconductor memory found in PCs, workstations and servers that is used to store data and program code.

The company’s DRAM rival, Samsung, was also trading up 4% on Tuesday. However, it’s growth has fallen behind that of SK Hynix.

On Friday, Samsung Electronics’ market cap reportedly slid to a 9-year low of 345.1 trillion won ($252 billion) as the chipmaker struggles to capitalize on AI-led demand.

SK Hynix, on the other hand, has become a leader in high bandwidth memory — a type of DRAM used in artificial intelligence servers — supplying to clients such as AI behemoth Nvidia.

A report from Counterpoint Research in April said that SK Hynix had captured 70% of the HBM market by revenue share in the first quarter.

This HBM strength helped it overtake Samsung in the overall DRAM market for the first time ever, with a 36% global market share as compared to Samsung’s 34%.

Technology

OpenAI wins $200 million U.S. defense contract

Published

13 hours ago

June 16, 2025

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OpenAI wins 0 million U.S. defense contract

OpenAI CEO Sam Altman speaks during the Snowflake Summit in San Francisco on June 2, 2025.

Justin Sullivan | Getty Images News | Getty Images

OpenAI has been awarded a $200 million contract to provide the U.S. Defense Department with artificial intelligence tools.

The department announced the one-year contract on Monday, months after OpenAI said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for “national security missions.”

“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Defense Department said. It’s the first contract with OpenAI listed on the Department of Defense’s website.

Anduril received a $100 million defense contract in December. Weeks earlier, OpenAI rival Anthropic said it would work with Palantir and Amazon to supply its AI models to U.S. defense and intelligence agencies.

Sam Altman, OpenAI’s co-founder and CEO, said in a discussion with OpenAI board member and former National Security Agency leader Paul Nakasone at a Vanderbilt University event in April that “we have to and are proud to and really want to engage in national security areas.”

OpenAI did not immediately respond to a request for comment.

The Defense Department specified that the contract is with OpenAI Public Sector LLC, and that the work will mostly occur in the National Capital Region, which encompasses Washington, D.C., and several nearby counties in Maryland and Virginia.

Meanwhile, OpenAI is working to build additional computing power in the U.S. In January, Altman appeared alongside President Donald Trump at the White House to announce the $500 billion Stargate project to build AI infrastructure in the U.S.

The new contract will represent a small portion of revenue at OpenAI, which is generating over $10 billion in annualized sales. In March, the company announced a $40 billion financing round at a $300 billion valuation.

In April, Microsoft, which supplies cloud infrastructure to OpenAI, said the U.S. Defense Information Systems Agency has authorized the use of the Azure OpenAI service with secret classified information.

WATCH: OpenAI hits $10 billion in annual recurring revenue