Apple (AAPL +0.47%) blew past Wall Street estimates with its fiscal 2026 first-quarter results announced on Thursday, Jan. 29, 2026. You might think that investors would be excited. However, that didn't appear to be the case. Apple's shares dipped slightly in early trading on Friday.
Was this reaction warranted, or is the market missing something about Apple? I lean toward the latter. Here are three reasons to buy Apple stock -- and one reason to think twice.
Image source: Getty Images.
1. A bull in the China shop
Apple has faced significant challenges in the Chinese market in the past. Any issues are legitimately concerning, considering that Greater China accounts for roughly 18% of the company's total revenue.
Investors can celebrate now, though, with the company's prospects in the country looking downright bullish. CEO Tim Cook said in Apple's earnings call on Thursday that sales in the Greater China market jumped 38% year over year in Q1.
Cook revealed that Apple set an all-time record for the number of iPhone upgrades in Greater China. Even more encouraging, the number of customers switching from other phones to iPhones increased by a double-digit percentage. This bodes well for Apple's services revenue growth in the Chinese market.
A survey conducted by World Panel found that iPhones ranked in the top three spots among smartphones used in urban China in the recent quarter. Apple's Chinese success wasn't limited to iPhones, though. According to the World Panel survey, iPad ranked No. 1 among tablets used in urban China. Counterpoint's research found that MacBook Air was the top-selling laptop in the Chinese market in December, while Mac Mini was the top-selling desktop computer.
2. All-in in India
China isn't the only Asian region where Apple seems to be firing on all cylinders. The company also enjoyed strong double-digit revenue growth in India. This impressive performance is important: India is home to the world's second-largest smartphone market and fourth-largest PC market.
Apple set a December record for iPhone sales in India. As in Greater China, the number of iPhone upgrades in India reached an all-time high in Q1.
Cook noted that although Apple has seen solid growth in India, its market share in the country remains "modest." He believes "there is a huge opportunity for us there." The company is taking steps to capitalize on this opportunity, opening its fifth store in India in December, with plans to open a sixth store in Mumbai soon.
NASDAQ: AAPL
Key Data Points
3. Siri is getting serious about generative AI
Apple has been viewed by many as a laggard in generative AI. Although the company rolled out genAI capabilities with Apple Intelligence beginning with the iPhone 15 Pro, its Siri AI assistant has become antiquated compared to other AI models.
That will soon change. Siri is getting a long-awaited upgrade, using Alphabet's (GOOG 0.04%) (GOOGL 0.07%) Google Gemini large language model (LLM). Cook said in the Q1 earnings call that Apple's team "determined that Google's AI technology would provide the most capable foundation for Apple Foundation Models."
He added that the company believes that it "can unlock a lot of experiences and innovate in a key way due to the collaboration." If Cook is right, the Gemini-enhanced Siri could spur even stronger growth in iPhone sales.
One reason to potentially pause on buying Apple stock
Apple's growth opportunities in China and India, along with the tremendous potential created by the new version of Siri, provide solid reasons for investors to consider buying the stock. However, there's also one potentially hold off on investing in Apple: Supply and demand dynamics could work against the company.
The biggest issue for Apple is the supply constraints on obtaining 3-nanometer systems-on-a-chip (SoCs). Cook said in the earnings call that Apple is "seeing less flexibility in the supply chain than normal." He added that "it is difficult to predict when supply and demand will balance."
Memory is another key challenge. Although memory supply constraints didn't have much of an impact on Apple's Q1 financials, it could be a different story going forward. The company expects a slightly higher impact on its gross margin in Q2. Cook also acknowledged that memory pricing could increase "significantly" after Q2.
