Apple reports earnings Nov. 2 under new CEO John Ternus
Apple Stock Faces Valuation Pressure Ahead of Nov. 2 Earnings Report
Apple has reached a $5 trillion market cap, making it only the second company in the world to hit that milestone. But the iPhone maker now faces intense valuation pressure as it prepares to report its 2026 fiscal fourth-quarter and full-year results on Nov. 2. The stock has climbed 27% year-to-date and trades at nearly 40 times trailing 12-month earnings.
The Tech TL;DR:
- Apple reports fiscal fourth-quarter and full-year earnings on Nov. 2, marking the first earnings spotlight for new CEO John Ternus.
- Management guides for 10% sales growth and a 47.5% gross margin, weighed down by skyrocketing memory prices that former CEO Tim Cook previously called a “100-year flood.”
- The company recently launched the iPhone Duo foldable phone, which sold out on launch day and is backordered through January, alongside new Apple Intelligence features like an updated Siri and Apple Home.
Memory Costs Pressure Sales Growth and Gross Margins
Management is guiding for 10% sales growth at the midpoint and a 47.5% gross margin for the upcoming report. Wall Street analysts expect 10.6% sales growth for the quarter and $1.98 in earnings per share, up from $1.85 last year. These expectations come against the backdrop of severe supply chain cost inflation.
Last quarter, former CEO Tim Cook warned of a “100-year flood on the memory pricing,” which continues to affect component costs and supply metrics. The company expects a lower gross margin and a deceleration in iPhone sales growth, attributing these shifts directly to soaring memory costs.
iPhone Duo Demand Exceeds Supply After Launch
Unlike many industry peers dedicating their primary focus to artificial intelligence, Apple relies heavily on its hardware engineering. The company recently launched the iPhone Duo, its first foldable phone that functions as both a standard smartphone and a small tablet. Customer demand for the device has significantly outstripped supply, selling out on launch day two weeks ago and pushing current orders out through January.
At the same time, the company is scaling Apple Intelligence. The newly deployed Siri voice assistant and the Apple Home assistant use hardware synchronization to pull data locally across emails and documents. With John Ternus stepping into the spotlight as the new CEO, markets will watch how executive leadership balances these hardware wins against broader macroeconomic pressures.