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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Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

2026 World Cup Reverses Seasonal Lull for Sports Betting Apps

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

South by Southwest Conference and Festivals

Gold Tesla Cybercabs are piling up, but they’re not picking up passengers yet

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Britain announces social media ban for under-16s starting early 2027

The UK government plans to use the same model for the restrictions as Australia — but how successful has that case study been so far?

UK Prime Minister Announces Under-16s Social Media Ban

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5