Apple Stock Surges as iPhone 17 and Mac Demand Fuel Upbeat Guidance

Apple shares jumped more than 3% on Friday after the iPhone maker reported better-than-expected quarterly results and issued revenue guidance for the current period that significantly exceeded analysts' estimates.

CEO Tim Cook, who is preparing to step down in September after 15 years at the helm, highlighted the company's strong performance despite ongoing supply constraints stemming from the global memory crunch.

The company announced late Thursday that revenue in the fiscal third quarter, ending in June, is projected to increase between 14% and 17% year-over-year, surpassing analysts' expectations of 9.5% growth. Continued demand for the iPhone 17 family, which Cook described as the "most popular lineup in our history," and various Mac models are driving this growth.

Apple recently launched a more affordable computer, the MacBook Neo, which Cook stated has seen "off-the-charts" customer response and higher-than-anticipated demand.

While analysts questioned Cook about addressing rising memory costs, he indicated the company would explore a range of options. Investors appeared largely unconcerned, with Morgan Stanley analysts noting that the results boosted their confidence in Apple's ability to manage margins, raising their earnings per share projection to $8.89 from $8.63.

Prior to the positive guidance, Apple reported a revenue and earnings beat for the fiscal second quarter. Revenue climbed 17% to $111.18 billion, exceeding the expected $109.66 billion. The company outperformed estimates for Mac, iPad, and services revenue, although iPhone sales fell slightly short.

Apple's services revenue grew approximately 16% to $30.98 billion, fueled by its large customer base of over 2.5 billion active devices and subscriptions to entertainment, Apple Pay, iCloud, and AppleCare.

The company's gross margin has steadily increased, reaching 49.3% in the latest quarter, up from 48.2% previously. Apple anticipates a gross margin between 47.5% and 48.5% for the June quarter. KeyBanc analysts noted that the margin forecast doesn't fully reflect the anticipated impact of memory price increases.

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