iPhone and iPad maker Apple (NASDAQ:AAPL) reported Q2 CY2026 results exceeding the market’s revenue expectations, with sales up 16.4% year on year to $109.4 billion. Its GAAP profit of $2.02 per share was 6.7% above analysts’ consensus estimates.
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Apple (AAPL) Q2 CY2026 Highlights:
- Revenue: $109.4 billion vs analyst estimates of $108.2 billion (1.1% beat)
- Services revenue: $30.7 billion vs analyst estimates of $31.2 billion (1.5% miss)
- EPS (GAAP): $2.02 vs analyst estimates of $1.89 (6.7% beat)
- Gross Margin: 50.1%, up from 46.5% in the same quarter last year
- Operating Margin: 32.6%, up from 30% in the same quarter last year
- Free Cash Flow Margin: 29.2%, up from 26% in the same quarter last year
- Market Capitalization: $4.97 trillion
Revenue Growth
Although Apple - with its installed base of 2 billion+ devices - displayed epic growth in its early days, its scale has begun to weigh on its expansion. The company’s revenue has only grown at a mediocre 6.1% annualized rate over the last five years, reaching $466.8 billion in the last year. This performance shows its market is maturing and that it must find a new hit product or service to re-accelerate growth.
Apple’s growth over the same period also trailed its big tech peers, Amazon (11.8%), Alphabet (15.1%), and Microsoft (14.6%) over the same period. This is an important consideration because investors often use the comparisons as a starting point for their valuations. When adjusting for these benchmarks, we think Apple is expensive. 
Long-term growth reigns supreme in fundamentals, but for big tech companies, a half-decade historical view may miss emerging trends in AI. Apple’s annualized revenue growth of 10% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Apple reported year-on-year revenue growth of 16.4%, and its $109.4 billion of revenue exceeded Wall Street’s estimates by 1.1%. Looking ahead, sell-side This projection is healthy for a company of its scale and illustrates the market sees some success for its newer AI-enabling Apple Intelligence products.
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Products: Steve Jobs’s Legacy
Apple’s Products segment includes everything from its flagship iPhone, iPad, and MacBook computers to AirPods and Apple Watch. We are closely monitoring whether the GenAI-powered Apple Intelligence, which was released in September 2024 but has limited interoperability with older devices, can spur an upgrade cycle for the company.
Products sales are by far the biggest chunk of Apple’s revenue at 74.2%, and they grew by 4.2% annually over the last five years, slower than total revenue. Recently, sales have accelerated, growing at a respectable annual clip of 8.9% over the last two years.
This quarter, Products sales were up 18.1% year on year. Holding aside expectations, the recently improving rate of change shows that more customers are upgrading their devices than before. We’ll be watching to see if Apple Intelligence and iOS 18 can accelerate this trend. Wall Street seems to believe it will slightly move the needle.
Key Takeaways from Apple’s Q2 Results
It was good to see Apple narrowly top analysts’ revenue expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. However, the all-important and high-margin Services segment missed on revenue, driving shares down 4.1% to $320.37 immediately after reporting.
Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).