Apple (AAPL 1.93%) has had plenty of doubters, especially over the past few years. Some feared that President Donald Trump's tariffs would significantly harm the business, since the tech giant does most of its manufacturing abroad, especially in China. Others continue to worry that Apple's legal troubles will catch up to it.
And still others think that since the iPhone no longer generates the excitement it once did, it can't drive strong sales growth anymore. However, Apple is proving that one of those fears is a bit overstated. Let's see what the company's CEO, Tim Cook, recently said.
Image source: Getty Images.
Apple's strong quarterly results
Apple recently released financial results for the first quarter of its 2026 fiscal year, the three-month period ending Dec. 27. The company's sales jumped by 16% year over year to $143.8 billion. Note that Apple had predicted revenue growth of 10% to 12%, which would have been strong for the company. We need to go back several years to find top-line growth in the double digits for the tech leader.
AAPL Revenue (Quarterly YoY Growth) data by YCharts
What drove Apple's strong performance? You guessed it, the company's largest segment by sales, the iPhone. Here's what Tim Cook said during Apple's earnings conference call: "The demand for iPhone was simply staggering, with revenue growing 23% year over year and all-time records across every geographic segment." The iPhone 17, launched late last year, is doing much of the heavy lifting. Apple's ongoing cycle of renewals should maintain its momentum through this quarter at least, with the company predicting sales growth of 13% to 16% in the current quarter.
NASDAQ: AAPL
Key Data Points
Why the stock is a buy
Not every future iPhone launch will be as successful as this one, but Apple is showing that its business model remains strong. Consumers tend to upgrade their devices every few years, and the company can add new features, including artificial intelligence-powered ones, that attract a large number of customers (including ones who previously didn't have an iPhone) and help boost sales. This helps the company grow its installed base.
The company now has 2.5 billion active devices, creating massive monetization opportunities in its high-margin services segment. Apple's profits and margin will grow at a good clip as services expand and account for a larger portion of revenue.
Will the company's challenges stop its long-term ambitions? In my view, they won't. Legal challenges, particularly antitrust lawsuits, have generally not led to catastrophic consequences for tech giants, and the company has found ways, time and time again, to navigate the tariff environment. For all those reasons, Apple remains an excellent stock to buy.
