Apple exceeds sales and profit expectations, but AI costs impact holiday sales

Apple reported revenue of US$ 114.5 billion (about R$ 622.7 billion) in the fourth fiscal quarter of 2026, which ended on September 26. This figure represents a 12% growth compared to the same period last year, setting a new quarterly record. Net income also increased, reaching US$ 30.7 billion (R$ 167 billion), corresponding to an annual increase of approximately 12%.

The financial data was made public this Monday (2) and exceeded Wall Street forecasts. The success was mainly driven by sales of the iPhone 18 Pro, while the services division also recorded its highest revenue ever.

Diluted earnings per share were US$ 2.10 (approximately R$ 11.42), marking a 14% advance over the fourth fiscal quarter of 2025. The gross margin stood at 47.9%, positively benefited by a tariff adjustment of approximately one percentage point.

This was the first quarterly report under the management of John Ternus, who took over as CEO in September, succeeding Tim Cook. The smartphone division was the highlight of the balance sheet, with iPhone revenue reaching US$ 57.6 billion (approximately R$ 313.2 billion), a 17% growth compared to the third quarter of 2025.

This result surpassed analyst estimates, which predicted around US$ 56.5 billion (R$ 307.4 billion). Strong demand for the iPhone 18 Pro models contributed to sales, despite the company's new approach to distributing device launches throughout the year.

The services division also showed remarkable performance, with revenue of US$ 31.6 billion (R$ 171.7 billion), an increase of about 10% compared to last year and a new historical record. This segment includes activities such as Apple Music, iCloud, and the App Store.

Additionally, the Mac computer division generated US$ 10.8 billion (R$ 58.7 billion), representing a growth of approximately 24% compared to the same period last year, also exceeding market projections.

Conversely, two product categories registered a decline. The results indicate that Apple's growth remains primarily concentrated in the iPhone and services, although computers have shown considerable expansion.

Despite the positive performance, the company faces the challenge of increasing costs for components used in manufacturing its devices, particularly memory chips. This cost increase is attributed to higher demand for such components, which is also stimulated by the expansion of artificial intelligence (AI) infrastructure.

According to John Ternus, higher prices for certain products helped partially mitigate this pressure on margins. Apple raised the prices of specific models in the iPhone 17 line by US$ 100 and also adjusted the prices of some MacBook computers.

The gross margin of 47.9% was higher than the 47.5% projected by analysts consulted by LSEG. Another aspect highlighted by the CEO was the functioning of the revamped AI Siri, which currently processes about 2.5 billion requests daily.

Apple also commented on the launch of the iPhone Duo, the company's first foldable smartphone, which occurred in October. The device sold out quickly online and caused queues in stores, but demand remains above supply capacity. In an interview with Reuters, Ternus confirmed that only a small fraction of units were returned due to screen issues, and the company is replacing these devices. The executive admitted that there is still no forecast to match supply and demand.

Since the iPhone Duo was launched on October 23, its sales were not included in the balance sheet released this Monday; the results of this device should appear in the next fiscal quarter.

The fourth quarter performance allowed the company to conclude its best fiscal year in terms of revenue. In 2026 cumulatively, Apple generated US$ 28 billion (R$ 152.3 billion) in operating cash flow during the fourth quarter, an amount returned to shareholders via dividends and stock buybacks. The board of directors also announced a dividend of US$ 0.27 per share (approximately R$ 1.47), scheduled for payment on November 16.

Despite the financial surplus, Apple's shares suffered a slight drop of about 1% in after-hours trading, amid sector volatility.

The sharp increase in flash memory costs, driven by the growing demand from artificial intelligence companies, has significantly altered the relationship dynamic between Apple and its supply partners. The company, which previously exerted great pressure for discounts, now faces higher expenses and diminished negotiating power.

According to TechInsights, the prices of these memories grew fivefold in the last year, strengthening the commercial position of manufacturers like Kioxia. For many years, Apple held the title of the world's largest buyer of flash memory, an essential component for storing data such as photos, music, and applications.

Previously, Apple's purchasing volume allowed it to demand low prices and favorable contractual terms. Two years ago, Apple purchased almost twice the amount jointly acquired by Microsoft, Amazon, Meta, and Google, according to TechInsights estimates. Currently, these four corporations together account for double the market share that Apple once held.

In 2026, Meta, Microsoft, and Amazon signed long-term supply contracts with Kioxia, agreeing to accept higher prices. These agreements also guarantee the manufacturer's profits should there be changes in the market scenario.

Although flash memory represents a smaller portion of the total cost of a data center compared to iPhone production, accounting standards allow these costs to be distributed over several years, which helps justify the higher payment made by AI companies for the components.

TechInsights projects that Apple will invest US$ 25 billion (approximately R$ 131.25 billion) in flash memory in 2026, compared to the US$ 6 billion (R$ 31.5 billion) forecast for 2025, to acquire a similar amount of material.

This increase caught Apple by surprise, even after prior warnings from analysts, according to sources familiar with the company's purchasing practices interviewed by The Wall Street Journal. In 2023, the price of flash memory reached five cents per gigabyte; with the demand from the AI sector, this value exceeded 30 cents, representing a jump of over 500% from that previous level.

The increased cost directly impacts the profitability of higher storage capacity versions. In the iPhone 17 Pro, Apple charged an extra US$ 200 for the 512 GB version compared to the base 256 GB model. At that time, the cost of the additional memory for the company was US$ 15, which rose to US$ 66.

An analysis by The Wall Street Journal indicates that, from the launch of these products until 2025, Apple generated, on average, more than US$ 0.80 in gross profit for every dollar charged for extra storage on iPhones and iPads.

Cost pressure is also accompanied by product price adjustments. In recent months, Apple has adjusted almost its entire line, registering an average increase of 13% in iPhones, including older models that are often more affordable with the arrival of new releases.

Walt Coon, an analyst at TechInsights, summarized the transformation in supplier positioning: 'Historically, Apple negotiated extremely rigorously with memory suppliers. And there is no shortage of satisfaction among suppliers now that the balance of power is shifting.'

The relationship between Apple and suppliers took shape in 2001 when Toshiba engineers presented the company with a 1.8-inch, 5 GB hard drive. Apple secured exclusive rights to this component, which became central to the iPod.

In 2005, the company began using flash memory in the iPod Nano and prepaid US$ 1.25 billion to secure supply until 2010. The launch of the iPhone in 2007 expanded its purchasing power and consolidated a negotiation tactic focused on low prices, financial audits of manufacturers, and contracts aiming for commercial conditions equal to or better than those offered to other clients.

In 2023, when reduced device demand caused memory prices to fall, Bernstein Research predicted operational losses of US$ 19 billion for the sector. In the same year, Apple earned US$ 14 billion in gross profit from the sale of additional storage. However, the expansion of artificial intelligence infrastructure raised demand and component costs, strengthening manufacturers in negotiations. The company that once used its purchasing power to impose terms now faces a market where securing supply means accepting higher costs.

Cybercriminals quickly exploited the software leak for profit. After vulnerabilities in PHP became public, Cloudflare recorded millions of exploitation attempts, highlighting the speed at which attackers can target open systems. The rise in attacks has once again raised concerns about the security of widely used systems and the urgent need to patch vulnerabilities.

Meanwhile, Apple appears to have captured the interest of premium smartphone buyers in India. It is reported that the company's first foldable model, iPhone Duo, sold out completely through pre-orders within the first week. This response indicates sustained demand for high-end devices as Apple enters the foldable phone market.

However, not all digital trends bring good news. The Securities and Exchange Board of India (SEBI) warned investors against fraudulent groups on WhatsApp that promise stock profits. Such groups may use fabricated reviews and misleading statements to gain trust before offering unauthorized trading advice or suspicious applications. Investors were advised to verify intermediaries before making any decisions.

Regarding the job market, a Quess Corp report forecasts the creation of 67,000 jobs in 2026 in India's global healthcare competency centers. Demand for specialized talent in technology and healthcare operations is expected to support this growth, strengthening the sector's shift towards more technology-driven work.

Infosys reported stable growth in the second quarter of fiscal year 27, with artificial intelligence becoming a key revenue source amid ongoing macroeconomic uncertainty. Nevertheless, slowing demand in North America and industry challenges negatively impacted its forecasts. The IT giant lowered its annual revenue growth forecast to 1–2% from the previous 1.5–3%, despite successfully closing major deals.

Discussion on the impact of AI on creative processes

At the TechSparks 2026 event, Chandrika Deb from Canva India discussed how AI is transforming workflows in creativity and workplace collaboration. She emphasized that human judgment and intent remain critically important for creating relevant content.