The Market 
Apple (AAPL) posted record September-quarter revenue of $114.5 billion, up 12%, with iPhone and Mac sales ahead of Wall Street estimates. But gross margin fell to 47.9% from 50.1% in the June quarter, and Apple guided December-quarter margin to 45% to 46%, below the 46.3% analysts expected, mainly because of rising memory chip prices. As of early afternoon on November 3, 2026, the stock was down about 2%.
Apple reported fiscal fourth-quarter results (quarter ended Sept. 26) after the close on Monday, Nov. 2. It was John Ternus’s first earnings report as CEO. Investors were watching one number above all: gross margin, the share of each sales dollar Apple keeps after paying to make its products. A global shortage of memory chips has pushed component prices sharply higher. If you want a refresher on where gross margin sits on the income statement, see how to read financial statements.
Step 1: The headline numbers
| Metric | Fiscal Q4 2026 | Change vs. a year ago |
|---|---|---|
| Revenue | $114.5 billion | +12% (September-quarter record) |
| Earnings per share (diluted) | $2.10 | +14% |
| iPhone | $57.6 billion | +17% |
| Mac | $10.8 billion | +24% |
| iPad | $6.2 billion | −10% |
| Wearables, Home and Accessories | $8.3 billion | −8% |
| Services | $31.6 billion (all-time record) | +10% |
| Greater China | $17.5 billion | +21% |
Sources: Apple newsroom, Apple condensed consolidated financial statements, earnings call transcript.
EPS included about $0.05 from tariff refunds. Demand was not the problem: iPhone revenue of $57.58 billion beat the $56.54 billion analysts expected, and Mac revenue of $10.79 billion beat the $9.61 billion estimate, while iPad and Wearables came in below estimates (CNBC).
Step 2: The margin squeeze
Gross margin was 47.9%, down from 50.1% in the June quarter, and that figure included about 1 percentage point from tariff refunds (CNBC).
For the December (holiday) quarter, Apple guided:
| Item | Apple guidance | Analyst estimate |
|---|---|---|
| Revenue growth | 7% to 10% | 6.1% (LSEG) |
| Gross margin | 45% to 46% | 46.3% (LSEG) |
| Services revenue growth | 8% to 9% | about 10.7% (Reuters) |
Sources: CNBC live updates, CNBC, Reuters via Business Standard.
CFO Kevan Parekh said the margin outlook “includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI” (CNBC). At the midpoint of that range, it would be Apple’s lowest gross margin since fiscal Q4 2023, CNBC notes.
Ternus was blunt: “What we’re seeing with memory pricing right now is unprecedented.” He added, “Looking beyond the December quarter, we see the pricing for memory purchases continuing to increase” (CNBC).
Step 3: The mixed signals
- Greater China grew 21% to about $17.5 billion but missed the roughly $18.6 billion analysts expected, per Reuters citing Visible Alpha (StockAnalysis).
- Services guidance of 8% to 9% growth trailed the roughly 10.7% analysts expected (Reuters via Business Standard).
- The stock: Apple shares slid 3% in morning trading on Tuesday (CNBC). As of early afternoon on November 3, 2026, AAPL was near $332, down about 2% from Monday’s $338.32 close (Yahoo Finance; our calculation).
Why it matters
Apple’s problem this quarter is cost, not demand. Even with record revenue and strong iPhone and Mac sales, Apple expects rising memory prices to cut into its margin. That pressure applies to every company that buys memory to build phones, PCs and servers. On the other side of the trade, higher memory prices are revenue for memory makers such as Micron (MU). A December-quarter margin inside Apple’s guided range would be its third straight quarterly decline (CNBC), which would test Apple’s pricing power.
For a contrast in how the market treats a margin story versus a growth story this earnings season, compare our breakdowns of Alphabet (GOOGL) Q3 2026 earnings and Palantir (PLTR) Q3 2026 earnings.
What to watch
- Whether Apple raises prices to pass memory costs on to customers.
- Memory pricing commentary from makers like Micron (MU).
- The Siri AI rollout and what it costs.
- Whether December-quarter gross margin lands inside the 45% to 46% range.
Sources
- Apple, “Apple reports fourth quarter results” (Nov. 2, 2026): https://www.apple.com/newsroom/2026/11/apple-reports-fourth-quarter-results/
- Apple condensed consolidated financial statements, fiscal Q4 2026: https://www.apple.com/newsroom/pdfs/fy2026q4/FY26_Q4_Consolidated_Financial_Statements.pdf
- Apple Q4 2026 earnings call transcript (The Motley Fool): https://www.fool.com/earnings/call-transcripts/2026/11/02/apple-aapl-q4-2026-earnings-call-transcript/
- CNBC, Apple earnings and John Ternus’s first test (Nov. 3, 2026): https://www.cnbc.com/2026/11/03/apple-earnings-john-ternus-faces-first-test-amid-high-memory-costs.html
- CNBC, Apple Q4 2026 earnings live updates (Nov. 2, 2026): https://www.cnbc.com/2026/11/02/apple-aapl-q4-2026-earnings-live-updates.html
- Reuters via Business Standard (Nov. 3, 2026): https://www.business-standard.com/world-news/apple-q4-results-beat-wall-street-estimates-on-strong-iphone-18-pro-demand-126110302007_1.html
- StockAnalysis, Apple fiscal Q4 2026 earnings summary: https://stockanalysis.com/news/apple-fiscal-q4-2026-earnings/
- Yahoo Finance, AAPL price history: https://finance.yahoo.com/quote/AAPL/history/
- Percentage changes marked as our calculation: The Market MBA, from the figures above
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