Earnings Preview | iPhone 17 Hot Sales + Steady Expansion of Service Business, Apple's Q4 Performance Expected to Grow Steadily

According to Zhitong Finance APP, Apple (AAPL.US) will announce its fourth quarter financial report for the fiscal year 2025, ending in September, on October 30th, Eastern Time. The market currently expects Apple's Q4 revenue to be $101.7 billion, with earnings per share of $1.76. The company's Q3 revenue was $94 billion, with earnings per share of $1.57. If the Q4 results meet market expectations, it will reflect the company's robust growth compared to the previous quarter.

Strong Demand for iPhone 17 Drives Optimistic Expectations

Despite ongoing trade uncertainties and competitive pressures in the Chinese market, analysts are increasingly optimistic about its performance, leading to a rebound in investor confidence. Market optimism has driven Apple's stock price to a historic high last week. This surge brings the iPhone manufacturer closer to becoming the third company globally to surpass a market capitalization of $4 trillion, supported by strong demand signals for the newly launched iPhone 17.

A report from research firm Counterpoint shows that the sales of the iPhone 17 in China and the U.S. in the first 10 days after its launch were 14% higher than the previous year's iPhone 16 series. Analysts point out that this momentum reflects strong demand for high-end models, indicating that even in a weak overall smartphone market, Apple can maintain profitability.

Evercore ISI believes that Apple "is likely to exceed current market consensus expectations for the September quarter and may provide optimistic guidance for the December quarter." The firm states that its "positive outlook stems from multiple iPhone-related data points, indicating that this may not just be an ordinary iPhone upgrade cycle," and notes that "the delivery wait time for the base model iPhone 17 has exceeded levels seen in October of last year."

Evercore expects Apple's Q4 revenue to grow by 8.1% quarter-over-quarter. However, the firm believes there is room for upside, citing strong growth in App Store revenue—estimated to grow approximately 12% quarter-over-quarter—and the resolution of legal and regulatory hurdles that previously impacted Apple's services business.

Continued Expansion of Services Business

Apple's continuously expanding services business remains one of the main drivers of market optimism. Services, including iCloud, Apple Music, and the App Store, currently account for about one-third of the company's total revenue, with a gross margin of around 75%, helping to offset declines in hardware profit margins.

The steady growth of the services business has become a strategic buffer for Apple against hardware market headwinds. Evercore ISI analysts suggest that Apple may "point out that the double-digit growth trend in the services business will continue, especially as we see several adverse factors affecting this sector (such as the U.S. Department of Justice's lawsuit against Google and the litigation between Apple and Epic Games) have been resolved this quarter."

Melius Research analyst Ben Reitzes stated that Apple currently has "the best long-term product roadmap in years." He mentioned that the upcoming "Siri 2.0" and next-generation home devices—including an AI hub and home robots—are expected to become new revenue sourcesAnalysts Have Divergent Views on Short-Term Outlook

Despite an overall optimistic tone, analysts' opinions are not entirely consistent. Jefferies maintains a cautious stance, expecting Apple's Q4 revenue and operating profit to be about 4% lower than Wall Street's consensus expectations. The firm pointed out that flat sales of products other than the iPhone and new tariff concerns are major risks. Jefferies lowered its price target for Apple from $205.16 to $203.07, warning that the company's heavy reliance on assembly in China may expose it to significant margin pressure from tariffs.

Nevertheless, other institutions remain confident. Evercore ISI reiterated its "Outperform" rating on Apple, with a price target of $290. Loop Capital upgraded its rating on Apple from "Hold" to "Buy," citing stronger-than-expected iPhone demand. Additionally, Evercore ISI indicated that Apple may provide guidance that exceeds market expectations.

Ben Reitzes anticipates that products like AI home hubs and home robots, combined with ongoing iPhone upgrades, will enable Apple's earnings per share potential to reach $10 "faster than expected."

Solid Fundamentals Mask Short-Term Concerns

Although tariff uncertainties and competition in the Chinese market continue to cast a shadow over Apple's outlook, analysts generally believe that the company's combination of high-margin service business and premium hardware provides a unique buffer against volatility.

Robust cash flow, strict cost management, and a growing recurring revenue ecosystem are seen as key advantages for Apple in an imbalanced global market environment. With early data indicating that the new round of iPhone sales is once again successful and new products on the horizon, Apple seems poised to maintain its leadership in the tech industry—provided that trade tensions and production costs remain manageable.

As Apple prepares to announce its earnings report on October 30, Wall Street's focus will be on whether the company can sustain its growth momentum in the first quarter of fiscal 2026 and whether the latest results will prove that one of the world's most valuable tech companies continues to move forward amid uncertainty