Microsoft Continues to Spend Big on A.I. While Profit Jumps 60%

Apple posted record quarterly revenue of $81.3 billion for the period ending September 2021, yet the tech giant’s share price tumbled more than 7% in after-hours trading following the announcement. The paradoxical market reaction came despite the company’s strong financial performance, which beat analyst expectations and marked a 36% year-over-year increase from the same quarter in 2020.

The revenue surge was driven by robust sales across Apple’s product portfolio, with iPhone revenue reaching $38.9 billion, up 47% from the previous year. Mac sales hit $9.2 billion, while iPad revenue climbed to $8.3 billion. Services revenue also grew substantially, reaching $17.5 billion as Apple’s subscription-based offerings continue to gain traction.

However, Wall Street’s response was less enthusiastic than anticipated. The stock decline suggests investors may have been expecting even stronger numbers, particularly given the high expectations surrounding the iPhone 13 launch and the broader tech sector’s performance. Some analysts point to supply chain constraints and component shortages as potential factors limiting Apple’s ability to fully capitalize on demand.

Apple CEO Tim Cook emphasized the company’s resilience in navigating these challenges, highlighting the strong customer response to new product launches and the continued growth of the company’s services ecosystem. The company also announced a $0.87 quarterly dividend and expanded its share buyback program by $90 billion, moves typically viewed positively by investors.

The market reaction underscores the heightened expectations placed on Apple as one of the world’s most valuable companies. Even record-breaking results can sometimes fall short of the astronomical projections that have become common for the tech giant. As Apple continues to navigate supply chain issues and expand into new markets like augmented reality and automotive technology, investors will be watching closely to see if the company can maintain its growth trajectory in an increasingly competitive landscape.

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