Apple(AAPL, Financial) appears to have emerged from a recent period of weak sales, which has sparked new enthusiasm for iPhones fueled by innovative artificial intelligence additions. Its fourth-quarter report showed 6% growth in iPhone sales, which totaled $46.22 billion for the three months to September. This growth contrasts with year-over-year declines and brings total revenue to $94.93 billion, $400 million ahead of forecasts.
Nevertheless, the increase brought Apple’s overall profit to $14.74 billion, 36% lower than the same period last year, mainly due to a one-time provision of $10.2 billion. for tax arrears following a decision by the Court of the European Union. In this case, for better understanding, if a dividend adjustment were to be made, it would have hit $1.64, which is in line with the forecasted $1.60.
This sales recovery was supported by the release of the iPhone 16 series with built-in AI capabilities, marketed as “Apple Intelligence”. However, the full range of AI capabilities as we know them today was enabled just a few days ago through a software update unique to the US market.
CEO Tim Cook has been optimistic about generative AI, calling it “just the beginning of what we think generative AI can do.” Some of these features will be launched in the international market in December, which could help increase international sales.
Institutional investors reacted differently; Apple stock fell nearly 2% after hours on concerns about the company’s revenue forecast for the upcoming holiday quarter. However, these concerns appear to carry little weight in Apple’s grand AI-centric strategy, as the company seeks to retrain its user base toward premium products in hopes of standing up to its rivals Samsung and Google.
This article first appeared on GuruFocus.