In This Story
Apple’s reveal of its AI strategy in June has sparked excitement and confidence in investors. Apple shares, which lagged at the start of the year, have jumped over 12% since before the announcement of its suite of AI tools, Apple Intelligence, during the Worldwide Developers Conference.
Apple is set to report its fiscal third-quarter earnings on Thursday, but many of its numbers won’t matter much to investors, according to Bank of America analyst Wamsi Mohan. Mohan said in a research note to investors Monday that “investors will mostly ignore” its sales figures and instead focus on executives’ commentary on its upcoming AI-enabled iPhones as well as revenue growth in China.
So far, Apple has clearly articulated an AI plan that’s inspired investors’ faith in its ongoing success. In contrast, Wall Street responded poorly to Google’s vague commentary on how it will justify the tens-of-billions it’s sinking into AI. But Apple’s outline of its AI plans and goals during WWDC drove its recent stock rally, and similar commentary on Thursday would likely do the same.
Apple could hit a couple snags, though. The company said this week that it’s delaying the rollout of Apple Intelligence, pushing the debut date from September to October. And its China sales, which aren’t suffering as drastically as they were at the beginning of the year, still face growing competition from Chinese smartphone maker Huawei. Apple has been growing in India, however — and this could help make up the difference.
Analysts polled by FactSet expect Apple’s revenue to hit $84.4 billion in its upcoming quarterly earnings report, a 3% increase from the third quarter last year. Apple’s expenditures are low compared to other tech companies spending big on AI. Google’s costs totaled $13 billion in its recent earnings report and Meta and Microsoft are expected to rack up costs of $9.5 billion and $13.7 billion, respectively. Meanwhile, Apple is expected to report capital expenditures of $2.3 billion, according to FactSet estimates.