In my opinion, Apple (AAPL -0.17%) is pretty much always a buy. The company keeps finding ways to grow revenue, and the numbers speak for themselves. Tim Cook's final full quarter saw $109.42 billion in revenue, up 16.4%. The iPhone pulled in $54.25 billion, while services hit a June-quarter record of $30.74 billion. That mix is a big reason why I'm bullish on Apple.
What the mix actually tells you
In Q3 for Apple, iPhone revenue grew 21.7% year over year, driven by the iPhone 17 family, with June-quarter records in every geographic segment and a record quarter for upgraders. Services grew 12.1% and now represents 28.1% of total sales, setting records across every category, including all-time highs in cloud and payment services.
Outgoing Apple CEO Tim Cook. Image source: Apple.
The reason this matters is margin structure. Services had a gross margin of 76.5% in the December quarter, roughly double that of hardware. Every point Services gains in the revenue mix lifts consolidated profitability without Apple selling a single additional device. Net income hit $29.8 billion, up 27%, on revenue that grew 16%. That gap is the mix working.
NASDAQ: AAPL
Key Data Points
The installed base is the moat
Apple's active device base surpassed 2.5 billion, an all-time high across all product categories and geographies. Paid subscriptions surpassed 1.5 billion, more than 50% above the roughly one billion Apple reported in 2023.
I think of Apple as a subscription business wearing hardware clothing. It does not need to sell more phones each year to grow. Apple needs the installed base to keep expanding and monetization per device to keep climbing, and both are happening. Installed base growth has become a more meaningful driver than annual unit sales.
What Ternus inherits
John Ternus will take over on Sept. 1. He's a 25-year Apple veteran who led hardware engineering across iPhone, iPad, Mac, Apple Watch, AirPods, and the Apple Silicon transition. Cook moves to executive chairman, staying involved in policy and long-term priorities. Johny Srouji becomes chief hardware officer.
This is continuity, not upheaval. Cook added $3.6 trillion to Apple's market value over 15 years, and the succession was planned rather than reactive. Ternus inherits a company generating $34.4 billion in quarterly operating cash flow.
The AI question was answered
Apple's biggest overhang was artificial intelligence, and the company resolved it with a pragmatic decision. In January, Apple signed a multi-year deal with Alphabet, (GOOG +0.64%) (GOOGL +0.79%) reportedly worth nearly $1 billion annually, to power the next Siri with Gemini models. At Apple's Worldwide Developers Conference in June, the company unveiled Siri AI with a stand-alone app, visual intelligence, on-screen awareness, and cross-app actions, which will ship in iOS 27 this fall.
Everything runs through Private Cloud Compute, so Google performs the computation without receiving identifiable user data. Apple chose capability over pride, licensing frontier AI rather than shipping an inferior in-house model two years late. For a company with a privacy brand to protect and 2.5 billion devices to upgrade, that was the right call.
NASDAQ: GOOG
Key Data Points
The product cycle ahead
Apple is tracking as many as 16 new products by year's end, one of its busiest stretches in years. The Sept. 9 event brings the iPhone 18 Pro and Pro Max with the A20 Pro chip and next-generation C2 modem, alongside the first foldable, expected to be branded iPhone Ultra with a 7.8-inch inner display. Analyst estimates put foldable pricing between $2,000 and $2,500.
A premium tier above the Pro models raises average selling prices without cannibalizing existing lines, the same playbook that worked with iPhone Air. Apple's market cap is near $4.67 trillion after the stock closed near $320, up 16.15% over the past 12 months. It is not cheap. It rarely is.
But a business growing revenue by 16%, earnings by 27%, with a 76.5% margin, segment expanding faster than the total, and 2.5 billion devices to sell into, does not need to be cheap to work. The mix of businesses that Cook handed Ternus is the strongest in Apple's history
