Should You Buy Apple (AAPL) Stock as iPhone Growth Returns?

TLDR

• Apple reported Q2 fiscal revenue of $111.2 billion, up 17% year-over-year, with EPS of $2.01, up 22%
• iPhone delivered a March-quarter revenue record, driven by strong iPhone 17 demand
• Services segment hit a new record, supported by the App Store, advertising, cloud, and subscriptions
• Apple authorized a new $100 billion buyback program and raised its quarterly dividend by 4%
• Wall Street holds a Moderate Buy consensus with an average price target of $314.85

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Apple reported fiscal second-quarter revenue of $111.2 billion, up 17% from the same period last year. Diluted EPS came in at $2.01, a 22% increase, while operating cash flow topped $28 billion.

Apple Inc., AAPL

The iPhone posted a March-quarter revenue record, driven by strong demand for the iPhone 17 lineup. Apple’s installed base of active devices hit an all-time high across every major product category and geographic region.

Double-digit revenue growth at this scale is not something you see every day. It points to an ecosystem that is still pulling in users, not just extracting more money from existing ones.

Services Keep Growing

The Services segment continued its run of strong performance. Revenue from the App Store, advertising, cloud storage, payments, and subscriptions gives Apple a recurring income stream that grows with its device base.

Apple now has roughly 2.5 billion active devices worldwide. Each one is a potential revenue source for years after the initial sale.

Services also improves margins. Software and subscriptions carry better economics than hardware, and the segment has become a key reason analysts stay positive on the stock.

Apple authorized a fresh $100 billion share-repurchase program and increased its quarterly dividend by 4%. The company’s cash generation makes this kind of capital return sustainable year after year.

Buybacks reduce the share count over time, which supports EPS growth even in periods of slower revenue expansion. The dividend raise, while modest, signals continued confidence in cash flow.

The caveat is that buybacks deliver less value when the stock is trading at a high multiple. Apple still needs underlying growth to back up its price.

AI and China Are the Key Risks

Artificial intelligence is the biggest open question. Apple has moved more slowly than Google, OpenAI, and others in developing advanced AI tools and conversational assistants.

The company has a potential edge in its direct access to billions of personal devices. A more capable Siri that pulls from messages, calendars, and photos could be a strong differentiator — but that product has not fully arrived yet.

Delayed Siri upgrades have already drawn criticism. If Apple cannot close the gap with competitors, it risks losing relevance in a category that could reshape how people use their devices.

China improved in early 2026, with stronger iPhone sales helping the region. Still, competition from Huawei and local brands remains a pressure point, and any supply chain disruption tied to trade policy could hit both sales and margins.

Regulatory risk around App Store fees and payment rules also lingers. A major ruling against Apple’s current model could put a dent in Services profitability.

Wall Street holds a Moderate Buy consensus based on 35 analysts, including 22 Buy ratings and 11 Holds.

The average 12-month price target sits at $314.85, close to where the stock currently trades, suggesting analysts see limited near-term upside from current levels.