Apple Q3 Revenue Update: Analysts Want AI Updates, Stock is Down 16%

After the expected AI-driven Siri setback and delay, Wall Street wanted to hear about the company's plans to stay competitive with AI Arms Race at WWDC 2025.

Apple has introduced new Apple Intelligence features like the AI-powered Personalized Shortcutss on Mac, but will be released next year with more of them saying “it took more time to reach a high-quality bar.”

The keynote focused primarily on “Liquid Glass,” a glass-like software design that will appear in Apple's gadget lineup this fall.

Investors believe Apple is lagging behind its AI initiatives and are looking to see if CEO Tim Cook shows a change in strategy.

Merius research analyst Ben Leitz said he'll hear potential updates about possible rumors that Apple will buy bewildered AI to help upgrade Siri.

Such a move could cause stock prices to skyrocket, he said.

“The market feels that Apple will reward you for being bold, so it could result in hundreds of billions of value,” Reitzes wrote in a July 21 note.

Merius has a price target of $240 for Apple stock.

President Donald Trump's demand for an American-made iPhone has caused Apple's tariff headaches. To avoid the heavy tariff costs associated with manufacturing in China, the tech giant is increasing production in India, increasing the number of US iPhones outside the region they once relied on.

Smartphones assembled in India accounted for 44% of US imports in the second quarter, jumping from 13% in the same period in 2024, estimated in an analysis published Monday by research firm Canalys.

“We expect that in the June quarter, most of the iPhones on sale in the US will have India as their country of origin,” CEO Tim Cook said in a revenue call on May 1.

iPhone makers are also looking for American options in their supply chain. On July 15th, it announced its $500 million investment in MP Material, a US producer of rare earth magnets. The deal was part of Apple's initiative to spend $500 billion in the US over the next four years.

In a memo earlier this week, Bank of America said its clients are most interested in Apple's second quarter and future estimated profit margins.

BOFA analyst Wamsi Mohan says tariffs should have a “meaning negative impact” on Apple's profits.

But one thing that can counter the hits to margins is the release of slimmer iPhones, Mohan said. The company was able to unveil a product that is likely to be sold at a higher price than the previous iPhone in September.

“We expect the slim iPhone to replace last year's Plus model and cost $100 more with the Plus model,” Mohan wrote.

Bofa has an Apple Stock “buy” rating and expects it to rise to $235 per share within the next 12 months.

Third Quarter

Revenues are estimated at $89.3 billion

• EPS Estimate $1.43
• Product revenue is estimated at $628.1 billion
• iPhone revenues estimated at $4.06 billion
• Mac Revenue estimates $7.3 billion
• iPad revenues estimated at $7.07 billion
• Wearables, Homes and Accessories estimate $7.78 billion
• Service revenue is estimated at $26.9 billion
• Greater China Rev. Estimated $151.9 billion
• Total operating expenses are estimated at $15.34 billion
• The total margin is estimated at $4.116 billion

  Fourth Quarter

• Capital expenditures are estimated at $3 billion

  Year-round

• Capital expenditures are estimated at $11.28 billion

Source: Bloomberg Data