Tim Cook delivers his last earnings call as Apple’s chief executive on Thursday after the closing bell in Cupertino, with consensus pointing to roughly $109.7 billion in revenue and $1.95 in diluted earnings per share for fiscal Q2 2026. That would be year-on-year growth of about 15 percent and 18 percent respectively, according to the analyst poll compiled ahead of the report by AppleInsider and corroborated by Visible Alpha. A clean print would mark Apple’s strongest March quarter on record.
The number sits on top of an unusually clean iPhone cycle. Channel data from Counterpoint Research and IDC put first-quarter iPhone shipments in mainland China up roughly 20 percent year-on-year, the strongest local print since 2021, as the iPhone 17 line rotated through volume after Apple Intelligence rolled out in mainland China earlier in the year with Baidu and Alibaba as the local AI partners. Independent supply-chain trackers polled by AppleInsider place iPhone revenue at roughly $56.5 billion, ahead of the consensus that Wall Street modeled at the start of the quarter.
Services and the gross-profit engine
Services, Apple’s second-largest reporting line, is tracking toward a record $30 billion quarter at a gross margin above 70 percent, according to Morgan Stanley research. At that scale Services contributes close to half of Apple’s gross profit while taking less than a third of revenue — the structural reason the operating leverage story has held up through a flat hardware cycle. The App Store’s developer take, Apple One bundling, and an enlarged advertising surface across News, Stocks, and App Store search remain the durable drivers; legal pressure from the Epic ruling on alternative payment processors remains the cap.
The Siri pivot and the Ternus handoff
The strategic centerpiece is Apple’s AI pivot, almost a year after Cook conceded at WWDC 2025 that the first Siri rewrite would slip. The overhauled Siri shipping with iOS 27 this fall will route a subset of complex multimodal queries through a Google Gemini partner endpoint, with on-device Apple Foundation Models handling latency-sensitive tasks. Reuters has reported the per-query commercial structure echoes the long-running search-default arrangement that already places Apple at the heart of the U.S. Department of Justice antitrust remedy hearings.
Cook hands the keys over on September 1, when Senior Vice President of Hardware Engineering John Ternus, a 25-year Apple veteran, takes over as chief executive. Cook becomes executive chairman. Analysts at Bernstein expect Ternus to use the September product event — staged around the iPhone 18 line and a refreshed Vision Pro — to lay out his own AI roadmap, including the long-trailed in-house Apple Foundation Server model that supply-chain reporting from DigiTimes places on Apple’s own data-center silicon by mid-2027.
What to watch on the call
Three lines decide the market reaction. First, iPhone 17 China gross margin: tariffs and DRAM cost inflation could clip blended product margin by 80 to 120 basis points, according to Bernstein. Second, Services guidance tone — anything materially below the 12 percent run-rate that Wall Street has baked in would compress the multiple. Third, capex commentary: Apple has run a deliberately understated AI infrastructure budget while Microsoft alone guided to roughly $190 billion of FY2026 capex this week and Meta lifted its envelope toward $145 billion. Even a modest step-up — toward $20 billion — would mark a strategic shift, and the first capex decision of the Ternus era.
The one number Cook is unlikely to commit to is the FY26 services growth rate beyond June. That hand belongs to the next CEO.
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