Apple CEO Tim Cook attends the opening ceremony of the China Development Forum in Beijing on March 23, 2025 (Adek Berry/Getty Images)

Apple slumps as big iPhone sales that drove earnings and sales beat may be tariff-fueled one-off

Revenue and EPS beat analyst expectations.

Rani Molla

5/1/25 4:48PM

Apple beat analysts’ expectations, bringing in adjusted earnings per share of $1.65 (the FactSet consensus estimate was $1.62) and revenue of $95.4 billion (analysts forecast $94.5 billion). Its iPhone revenue was $46.8 billion, compared to the $45.97 billion analysts expected and up about 2% from the $45.96 billion it was in Q2 2024.

Apple is trading down after-hours.

While overall sales were strong, revenues from China declined and missed estimates, and its services sales were also a touch light.

Moreover, there’s concern that its iPhone sales, which notably exceeded expectations, represent a one-off pulling forward of demand from customers worried that tariffs will drive up its costs.

Investors will be focused on any color about how and where Apple is moving its supply chain and how these trade levies might affect the company.

The Trump administration’s tariffs on China stand to hurt Apple more than any other Big Tech company. Apple makes about 75% of its revenue from physical products, including iPhones and Macs that are mostly made in China, where tariffs are as high as 145%. Apple and other semiconductor-based electronics companies were recently granted an exemption from those tariffs only to learn they were simply being thrown into other buckets, whose levies have yet to be specified.

The Financial Times recently reported that Apple was trying to move all of its manufacturing for iPhones for the US market to India next year.

Apple had faced sluggish iPhone sales, with a year-over-year iPhone revenue decline last quarter. Additionally, it’s been lagging its peers in the AI space and has delayed a number of AI features from its iPhone 16 — something that culminated in a personnel shakeup and may be slowing new purchases of its flagship product even more.

Apple has also been beset by legal troubles recently.

Following its own antitrust trial back in 2021, Apple was told to enable third parties to direct customers off the App Store to make in app-purchases. Apple did so but charged a 27% commission on purchases that happened on those third-party websites — a work-around that a federal judge yesterday forbade it from doing in a ruling that could cost the company billions in revenue each year.

And as part of Google’s antitrust remediation, Apple also stands to lose the roughly $20 billion a year it gets from the search giant to be the default browser on iPhones.

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Judge blocks Pentagon’s move to blacklist Anthropic

A federal judge in Northern California has granted a preliminary injunction blocking the Pentagon from labeling Anthropic as a national security supply chain risk.

The ruling temporarily prevents the Defense Department from restricting the AI company’s access to federal contracts amid a dispute over its refusal to allow certain military and surveillance uses of its technology. The designation could also have shifted lucrative government work toward competitors, including OpenAI.

Earlier this month, Anthropic, the company behind Claude, sued 17 federal agencies and their heads, alleging the government exceeded its statutory authority.

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Report: SpaceX’s record IPO may grant preferential access to retail investors and Tesla shareholders

SpaceX’s impending IPO could raise $40 billion to $80 billion and rank as the largest ever — as well as one of the most unconventional.

The Wall Street Journal reports several ways CEO Elon Musk is considering breaking with IPO norms:

Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

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Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

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Tesla released estimates for Q1 deliveries and they’re lower than analysts expected

Ahead of first-quarter earnings next month, Tesla released its own company-compiled Wall Street consensus estimate for deliveries: 365,645 vehicles. While that’s lower than the 382,000 FactSet consensus estimate, it represents a nearly 9% jump from Q1 2025, when Tesla sold 336,681 vehicles.

Tesla started releasing its own consensus estimates to the public — not just institutional investors — for the first time in Q4 2025. The move was seen as a way to temper investor expectations, as other estimates were too high. Last quarter, Tesla’s compilation was closer to actual numbers, which fell 16% year over year.

The market-implied odds from event contracts suggest 64% of traders think Tesla’s Q1 deliveries will be more than 350,000, 44% think it will be higher than 360,000, and just 21% have it at higher than 370,000.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

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ARC-AGI-3 is the latest version of a clever benchmark that challenges AI models to solve mini video games with no written instructions.

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