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Market valuation

Apple recently reached a $4 trillion market capitalization for the first time, making it the second-largest company by market cap after Nvidia. That milestone raises the stakes for the upcoming earnings release, since a weak report could erode investor confidence and prompt profit-taking from these highs.

iPhone sales

Investor focus for the report is squarely on iPhone performance, particularly the iPhone 17 and whether it can drive a notable upgrade cycle. Analysts are modeling roughly a 10% increase in revenue from phone sales alone as a key metric to assess how this model compares to the iPhone 16.

Data from Counterpoint Research indicates that iPhone shipments in the first 10 days after launch in the U.S. and China were about 14% higher than the prior model. While that early-period figure is informative, investors will want to see how sales have held up over the full post-launch period.

China market

China remains a critical market for Apple and a long-term strategic priority. The company faces strong competition from domestic brands such as Vivo, Xiaomi and Huawei, and a consumer shift toward local manufacturers has presented a headwind. Emerging markets, including India and Southeast Asia, are monitored as potential offsets if China softens.

Any evidence of traction in those regions could support Apple's international growth opportunity set and help reassure investors about future expansion prospects.

Services performance

Apple's services segment has been a strong contributor in recent years, and analysts forecast about 13% year-over-year revenue growth in this area. The services mix includes Subscriptions, the App Store, iCloud and AppleCare+, which are higher-margin lines that support overall profitability.

With margin and cost pressures present, services growth is an important lever for supporting net income.

Artificial intelligence

Investors have sought clearer signals about Apple's direction in artificial intelligence, including where R&D dollars are being allocated, potential partnerships and a product roadmap. Market participants will watch for any disclosures that shed light on Apple’s competitive positioning as AI gains prominence, especially as players like OpenAI signal device ambitions.

Holiday quarter

The company’s largest quarter of the year is approaching, and expectations are for strong seasonal performance. Revenue is set to rise to $131.82 billion next quarter; maintaining or raising that outlook is viewed as important for demonstrating progress versus last year’s $124 billion.

Capital allocation

Historically, Apple has repurchased hundreds of billions of dollars worth of shares from the market. In the current cycle, some investors may prefer that capital be directed toward research and development, particularly for artificial intelligence initiatives, on the view that R&D investment can yield greater long-term value than buybacks.

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