Apple delivered a solid June quarter Thursday evening, and the stock moved higher. However, the lack of any real artificial intelligence strategy updates tempered investor enthusiasm. The stock remains an AI “show me” story — and in a market currently being powered by the AI trade, that’s all anyone really cares about. Revenue in Apple’s fiscal 2025 third quarter, which ended in June, rose 10% year over year to $94.04 billion, outpacing the $89.5 billion consensus estimate compiled by LSEG. It was the company’s biggest growth in quarterly revenue since December 2021. Earnings per share (EPS) increased 12% in the quarter to $1.57, better than the $1.43 consensus estimate, according to LSEG. The strong performance comes even as Apple saw a roughly $800 million drag due to tariff-related costs . That was $100 million less than Apple CEO Tim Cook had estimated back in May. On Thursday evening’s post-earnings call, Cook projected a $1.1 billion negative effect from tariffs in the September quarter, assuming no changes. Why we own it Apple’s dominant hardware and growing services businesses provide a deep competitive moat and plenty of bundling opportunities. Management’s net cash-neutral strategy provides confidence that free cash flow will continue to fund dividends and buybacks. Competitors: Samsung, Huawei, Xiaomi, OPPO, Dell , and HP Inc. Most recent buy : April 8, 2014 Initiation : Dec. 2, 2013 Bottom line Both sides of Apple’s business — products and services — saw June quarter revenue and gross income come in better than expected and higher year over year. Apple once again achieved a new all-time high for its installed base of active devices in all product categories and across all geographic regions. Services, meanwhile, set a new record with better-than-expected gross margin performance. Remember, a small miss on services revenue in the March quarter hit the stock pretty hard at the time. So, it was nice to see services turn. On the call, Cook said the company saw growth accelerate in the “vast majority of markets” that Apple tracks, including Greater China and many emerging markets. Moreover, he noted that the company set June quarter revenue records in over 24 countries and regions, “including the U.S., Canada, Latin America, Western Europe, the Middle East, India and South Asia.” Regarding China, it’s clear that the Chinese consumer still loves Apple, with iPhone sales accelerating sequentially to set a new record installed base. Mainland China set a June quarter record for iPhone upgrades, and according to consumer data tracking service Worldpanel, formerly Kantar, the iPhone held the top three spots in urban China. MacBook Air was the top-selling laptop in China during the June quarter, while the Mac Mini was the top-selling desktop there. Cook also touched on AI, reaffirming his view that it is “one of the most profound technologies of our lifetime.” He added that Apple Intelligence is being integrated across the company’s various platforms, and the company is “significantly growing” its investments in the technology. There, unfortunately, was not much of an update beyond what we already know. However, Cook said the team continues to make progress on a more personalized Siri, with plans for a launch of the updated personal assistant sometime next year. He also said, “We’re open to M & A that accelerates our roadmap.” That statement did not directly address reports back in June that Apple held internal discussions about whether to make an offer to buy AI startup Perplexity. But Cook saying that Apple is open to bringing in help is a welcome sign. AAPL YTD mountain Apple YTD Given the strength of the report and what appears to be a better-than-expected outlook for the current September quarter, it was no surprise to see the stock trading more than 2% higher in the after-hours session. That said, it’s a relatively muted move, given the positive results and the stock’s year-to-date decline of 17% as of Thursday’s close. The S & P 500 has gained nearly 8% in 2025. In our view, this is likely a reflection of investors being hesitant to get more optimistic on the stock until we get more clarity on Apple’s AI initiatives. While we fully understand that view, we too want more clarity on the road map for Apple Intelligence and would love to one day wake up to news that Apple has struck a deal to acquire Perplexity, results like this are a reminder of why investors should stick with Apple though times like this, even if it’s not yet time to recommend the stock as a buy. Apple is rarely the first to adopt new tech, choosing instead to take its time, see what’s out there and how consumers are responding, and then release a more refined version. Should that be the case again this time, and Apple does indeed come to market with the kind of AI features we should all expect from a company of this caliber, then it can instantly push the updates to its legion of loyal users with a simple software update and become a serious player in personal AI. We know Meta Platforms is looking to create a more personal AI, however, given the deep connection Apple users have with their iPhone and other devices, we still think Apple has a real opportunity to lead here. The company just needs to execute. While AI execution, thus far, has left something to be desired, betting against Cook over the long term has truly been a loser’s gamble. We think that will prove true again. However, until we do get more clarity on the AI roadmap and a timeline for a real upgrade to turn Siri into a conversational, problem-solving digital assistant, we have no choice but to maintain our hold-equivalent 2 rating. We’re also keeping our price target on the stock at $240 per share, roughly 16% upside to Thursday’s close but still 8% below its record-high close of $259 on Dec. 26, 2024. Commentary Looking at the Products portfolio, the iPhone, which shipped its three billionth device since launch during the quarter, set a June quarter sales record of $44.58 billion. That was up 13.5% from last year and better than expected. Growth was seen in all geographic segments, with double-digit percentage growth in emerging markets including India, the Middle East, South Asia, and Brazil. Apple delivered a June quarter record for iPhone, Mac, and Apple Watch upgrades. While Mac sales rose nearly 15% in the quarter and beat estimates, the iPad, as well as wearables, home and accessories segments declined year over year and missed. Services achieved a new all-time sales record, growing double digits in both developed and emerging markets alike. Services revenue rose more than 13% to $27.42 billion. Cloud services sales accelerated sequentially to a new all-time revenue record, driven by strength in iCloud. Apple TV+ viewership was up double digits versus the year-ago period. App Store revenue was also up double digits year over year, setting a June quarter record. Additionally, Parekh called out a new all-time high for both transacting and pair accounts. Outlook While Apple doesn’t provide formal guidance, management said that September quarter revenue is expected to increase by mid-to-high single digits versus the year ago period. That sounds in-line to better than the 3.3% year-over-year growth the Street was looking for, according to LSEG. Services revenue is expected to grow at a year-over-year rate similar to the more than 13% increase in the June quarter. The Street was expecting to see 11% growth in the September quarter versus the year-ago period. So, this also appears to be in-line to better than expected. Gross margin for the September quarter is expected to be in a range of 46% to 47%, which would be better than the 45.7% expected, according to FactSet. This includes the estimated $1.1 billion tariff-related headwind mentioned earlier. Management expects September quarter operating expenses to be between $15.6 billion and $15.8 billion, a bit higher than expectations of about $15.4 billion, according to FactSet. This guidance assumes no deterioration in macroeconomic conditions and no changes in global tariff rates, policies or enforcement. It also assumes Apple’s revenue share agreement with Google remains intact. The king’s ransom paid Apple for Google search priority has been called into question due to the government’s antitrust case against Alphabet . Capital allocation Apple ended the March quarter with $133 billion in cash and marketable securities. Excluding debt, net cash was $31 billion. During the quarter, Apple returned over $27 billion to shareholders, including $3.9 billion in dividends and equivalents and another $21 billion via share repurchases. (Jim Cramer’s Charitable Trust is long AAPL, META, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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