Apple earnings preview: investors focus on iPhone demand, services growth and China
Apple reports fiscal Q1 results on 29 January 2026, covering the crucial holiday period. Investors focus on iPhone demand, services growth and China performance.
Apple earnings preview: Can the tech giant deliver another strong quarter on 29 January?
Apple is set to report its latest quarterly earnings on 29 January, with investors looking for clarity on whether one of the world's most valuable listed companies can sustain earnings momentum amid a mixed global demand backdrop and rising expectations around artificial intelligence (AI).
The results, which cover Apple's fiscal first quarter (Q1), include the critical holiday shopping period and are typically the most influential release of the year for the stock.
Apple Q1 financial expectations:
Apple is expected to report solid revenue, net income and dividend growth.
Revenue:
$138.42 billion, 11.3% above its $124.30 billion in the same period a year ago.
Net income:
$39.38 billion, up 8.4% compared to a year ago.
Earnings per share (EPS):
2.67 cents, up 11.2% compared to a year ago.
Resilient prior quarter sets positive tone
The backdrop to the update is one of cautious optimism following Apple's recent operational performance. In its previous quarter, Apple delivered resilient overall revenue and solid profitability despite continued softness in some hardware categories.
Services once again proved the standout performer, posting strong growth and reinforcing the strategic importance of recurring, high-margin revenues from the App Store, subscriptions, payments and digital content. That performance helped offset weaker trends in devices, particularly in iPhone volumes, where replacement cycles have lengthened and competition in key markets has intensified.
The holiday quarter typically represents Apple's strongest period for consumer electronics sales. Christmas gift-buying, year-end spending and new product launches traditionally drive significant revenue during this timeframe.
iPhone demand remains critical focus
For the January release, the spotlight will again fall on iPhone demand, especially in China, where Apple has faced pricing pressure and market-share challenges from domestic rivals. Investors will want to see whether recent promotions and product refreshes supported volumes through the holiday quarter and whether average selling prices held up.
While Apple no longer discloses unit sales, regional revenue trends will be closely scrutinised as a proxy for underlying demand. The iPhone remains Apple's largest single product category and drives ecosystem engagement across other products and services.
Services division drives margin expansion
The Services division is expected to remain a key earnings driver and represents Apple's highest-margin business segment. Investors will look for continued double-digit growth and margin expansion, which have become central to Apple's long-term investment case.
Any signs of slowing momentum in Services would likely weigh on sentiment, while evidence of sustained growth would reinforce confidence in Apple's ability to generate stable cash flows even when hardware sales fluctuate.
The Services portfolio includes the App Store, Apple Music, iCloud, Apple TV+, Apple Fitness+ and various other subscription offerings. This diversified mix provides resilience and multiple growth avenues.
Recurring revenue from Services creates more predictable cash flows compared with hardware sales, which are inherently more cyclical. This characteristic makes Services particularly valuable for supporting Apple's premium valuation multiples.
China performance under scrutiny
Another area of focus is China, both as a manufacturing base and an end market for Apple products. Apple has previously acknowledged a tougher trading environment in the region, and the January results should provide further insight into whether conditions stabilised toward the end of the year.
Commentary on geographic diversification of the supply chain may also attract attention, given ongoing geopolitical, tariff and regulatory considerations.
China represents one of Apple's largest markets, making performance there crucial for overall growth prospects. Economic conditions in China, competitive dynamics with local brands and regulatory considerations all impact Apple's regional performance.
The Chinese smartphone market has seen intense competition, with domestic manufacturers like Huawei, Xiaomi and Oppo gaining market share. Apple must demonstrate its premium products continue resonating with Chinese consumers despite patriotic purchasing trends.
Key metrics investors should monitor
Several specific metrics will provide crucial insight into Apple's quarterly performance:
- Total revenue and year-on-year (YoY) growth rates
- iPhone revenue and regional breakdown, particularly China
- Services revenue growth and margin trends
- Gross margin and operating margin performance
- Earnings per share (EPS) versus analyst expectations
Margins and capital allocation strategies
Cost control and capital returns will also be under the microscope following the earnings release. Apple's margins have proven resilient, supported by scale, pricing discipline and a favourable mix shift towards Services.
Investors will expect confirmation that margins remain robust despite higher input costs and currency movements. Apple's operational efficiency and supply chain management have historically supported industry-leading profitability.
Meanwhile, Apple's substantial share buyback programme and dividend policy continue to underpin the stock's appeal to income-oriented and long-term investors, making any update on capital allocation relevant.
Apple's strong balance sheet and cash generation capacity provide flexibility for both returning capital to shareholders and investing in research, development and strategic initiatives. How management balances these priorities influences investor sentiment.
Artificial intelligence narrative emerges
Finally, artificial intelligence (AI) remains an emerging narrative that could significantly influence Apple's future growth trajectory. While Apple has been more measured than some peers in its public AI messaging, markets will be alert to any commentary on AI-driven features, ecosystem integration or investment plans.
Even incremental signals could influence sentiment, given the broader market focus on AI-related growth opportunities.
Apple's approach to AI emphasises practical applications and user privacy rather than aggressive AI branding. Features like enhanced Siri capabilities, computational photography and personalised recommendations demonstrate AI integration without explicit marketing.
The competitive landscape in AI includes companies making substantial investments and bold claims about AI capabilities. Apple must demonstrate its AI strategy remains relevant without compromising its privacy-focused brand positioning.
Valuation considerations and market expectations
In summary, Apple's 29 January 2026 earnings are likely to be judged less on headline growth and more on quality and resilience of earnings. Strong Services performance, stable margins and reassuring commentary on iPhone demand would support the view that Apple remains well positioned in a challenging global environment.
Conversely, any sign of sustained weakness in key markets or slower Services growth could prompt renewed debate about the near-term trajectory of earnings, particularly with the shares already pricing in a high degree of stability.
Apple's valuation multiples reflect expectations of consistent execution and durable competitive advantages. The company trades at a premium to many technology peers based on its profitability, brand strength and ecosystem lock-in.
Market expectations ahead of earnings have been tempered by concerns about hardware demand softness. This creates potential for positive surprises if Apple demonstrates better-than-anticipated performance across key categories.
Apple analyst ratings
Fundamental analysts maintain a buy rating on Apple, with a long-term consensus price target of $285.59, implying roughly 16% upside from current levels as of 21 January 2026.
Apple LSEG Data & Analytics chart
Apple has a TipRanks Smart Score of “6 - Neutral” alongside a buy rating.
Apple TipRanks Smart Score chart
Technical analysis of the Apple share price
The Apple share price – down over 9% year-to-date amid a general slump in technology stocks due to risk-off sentiment – still trades around 11% above its level from a year ago.
Apple daily candlestick chart
Apple shares are currently testing their October trough which seems to be offering support, together with the early-to-mid September highs at $241.32 - $241.22.
Were this support area to give way, the mid-August high and 200-day simple moving average (SMA) at $235.12 - 234.17 could be revisited.
For a potentially bullish reversal to occur a rise and daily chart close above the 55-day SMA at $206.89 and the mid-January high at $261.82 would need to be seen. Only then could the psychological $300 region be back in sight.
How to trade Apple shares
Investors interested in Apple have several options for gaining exposure to one of the world's most valuable technology company. Here's how to approach trading or investing in Apple:
- Research Apple's latest financial performance, product pipeline and competitive positioning thoroughly. Understanding technology sector dynamics and consumer trends helps inform investment decisions. How to invest in stocks provides a useful background.
- Choose whether you want to trade or invest in Apple shares. Trading allows speculation on short-term price movements around earnings releases, whilst investing involves taking a longer-term view on the company's prospects.
- Open an account with a broker that provides access to US-listed shares. Apple trades on the NASDAQ exchange under the ticker AAPL.
- Search for Apple shares on your chosen trading platform. Review current pricing, analyst recommendations and key financial metrics before proceeding.
- Place your trade based on your analysis and risk tolerance. Consider using stop-loss orders to manage downside risk, particularly around volatile earnings announcements.
Spread betting and CFD trading allow speculation on both rising and falling prices.
Remember that individual stock positions carry concentration risk. Diversification across multiple holdings reduces portfolio volatility compared with holding single stocks like Apple alone.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Follow us online
