Apple Q4 2024: AI Boosts Revenue, Outlook Lowers Share Price

by | Nov 1, 2024 | Latest News, Latest News On Artifical Intelligence (AI) | 0 comments

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On October 31, Apple Inc. reported its Q4 2024 earnings, showcasing a revenue of $94.9 billion. This marks a 6.1% increase from the previous year and surpasses analyst estimates of $94.6 billion. The company also reported earnings per share (EPS) of $1.64, up from $1.46 a year prior, exceeding expectations of $1.49.

Key Highlights

iPhone Sales: Apple’s flagship product saw sales rise 5.5% year-over-year to $46.2 billion. This figure exceeded estimates of $45.5 billion, despite only eight days of sales for the newly launched iPhone 16, which debuted on September 20.

AI Integration: Apple has added artificial intelligence features to its latest iPhones and other products, such as the iPad and Macs. These features, branded as “Apple Intelligence,” aim to meet consumer expectations and compete with rivals. However, they currently offer limited functionality, mainly providing notification summarization. Currently in beta, this feature is available only in US English and only on the iPhone 16 and Pro models of the iPhone 15. Apple expects to roll out more features and languages by December.

Challenges Ahead

Despite strong earnings, Apple’s financial chief, Luca Maestri, expressed a cautious outlook for the upcoming quarter. He expects low to mid-single-digit revenue growth year-over-year, which falls short of Wall Street’s expectations of over 6.5%. This equates to an anticipated revenue of $127.5 billion.

Apple executives, including CEO Tim Cook, avoided questions about iPhone sales performance in China, a critical market where the new AI features are currently unavailable. This uncertainty may have raised investor concerns.

Stock Market Reaction

Following the earnings report, Apple’s stock closed down 1.82% to $225.91 on October 31. After hours, it fell further by 1.86% to $221.71, as reported by Google Finance. Despite this decline, Apple’s share price has risen approximately 21.7% year-to-date. Additionally, sales in China reached $15 billion, which fell short of the $16.3 billion estimated by analysts, further impacting investor sentiment.

As Apple navigates these challenges and works to improve its AI offerings, the market will closely monitor how these factors affect future performance, particularly in key regions like China.

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