Apple shares fall despite exceeding earnings expectations

Huo Xing Finance reports that on November 3, according to data from the BIT stock platform, Apple closed down 1.83% this morning and fell an additional 2.5% in after-hours trading. Why did the stock face selling pressure despite beating earnings expectations? This morning, Apple released its fourth-quarter fiscal year 2026 results, reporting revenue of $114.48 billion, an 11.7% year-over-year increase, and EPS of $2.10—both exceeding expectations. iPhone revenue surged 17.5% year-over-year to approximately $57.6 billion, while Mac revenue rose nearly 24%, showing strong performance. However, revenue from Greater China increased 21% year-over-year to about $17.5 billion but still fell short of analyst expectations by approximately 6.5%. Service revenue growth slowed to around 9.8%, the lowest level in three years, and the company provided a guidance for next quarter’s service revenue growth of only 8%-9%, significantly below market expectations. More critically, management forecasted next quarter’s gross margin to decline to 45%-46%, below analysts’ expected 46.3% and notably lower than this quarter’s 47.9%, primarily due to rising storage costs and increased expenses related to AI. Although the guidance for next quarter’s revenue growth of 7%-10% exceeded expectations, after months of substantial stock price appreciation and elevated valuations, weaker-than-expected performance in China, slowing service growth, and downward pressure on gross margins triggered investor profit-taking.