Apple reported a better-than-expected fiscal 2026 quarter, with revenue of $114.48 billion, up 12%, and earnings per share of $2.10, up 14%. The shares nevertheless fell about 3% after hours as management forecast slower services growth and a gross margin of 45% to 46%, below the 46.9% consensus estimate. Apple continues to generate substantial free cash flow and repurchased $24 billion of stock during the quarter, while its foldable iPhone Duo, which sold out immediately upon launch, did not contribute to revenue. We raised our price target from $340 to $360 but kept a hold-equivalent 2 rating because of the stock’s strong rally and valuation of more than 35 times estimated earnings per share over the next 12 months.
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