Apple's new chief executive, John Ternus, will step into the spotlight on Monday for his first earnings call, and the stakes could hardly be higher. Investors are zeroing in on two big questions: Can Apple's artificial intelligence strategy and its new $1,999 foldable iPhone Duo offset a sharp jump in memory-chip costs? And can the company keep its profit engine humming as growth in its services business slows?
What to expect from the numbers
Apple's fiscal first quarter, which covers the July-to-September period, is landing with extra scrutiny because it pairs new product launches with a cost squeeze. Analysts tracked by LSEG via Reuters expect revenue of about $113.39 billion, up nearly 11% from a year earlier. Net profit is seen rising roughly 6% to $29.04 billion, a slower pace than sales growth, as pricier memory chips eat into the benefit of higher revenue.
The iPhone picture is also messy. Forecasts call for iPhone revenue of $56.54 billion, up about 15%, but that quarter captured only nine days of iPhone 18 Pro sales, and the iPhone Duo didn't launch until October 23. That pushes attention to Apple's holiday-quarter outlook, including early demand for the Duo and whether supply constraints will cap shipments. Bank of America, an investment bank, has estimated delivery waits of 79 days, suggesting demand is strong but production may be struggling to keep up.
For context, memory-chip costs have been climbing across the tech industry, driven by a boom in AI data centers that has soaked up supply. That's a direct hit to Apple's margins, since memory is a key component in every iPhone and Mac. The company has faced similar cost pressures before, but the timing here is awkward: just as it launches a high-priced new device, its input costs are rising.
The AI question: 'everyday people' and the App Store
Apple has pitched its AI approach as built for "everyday people," with privacy and trust as selling points. But investors want a clearer business model. One idea floating around: Apple could let third-party "AI agents"—apps that can take multi-step actions for you, like booking a trip or managing your calendar—sell through the App Store, with Apple taking its usual commission.
That matters because services revenue is expected to rise almost 10% to $31.56 billion, its slowest pace in over three years. If that engine is cooling while memory costs rise, Apple's profit story depends more on high-margin, repeatable income than on selling more devices. The App Store question is central: if Apple becomes the default storefront for third-party AI agents and takes a cut of subscriptions or transactions, it could add incremental revenue that typically carries higher margins than hardware.
On Monday, investors will listen for whether Ternus can outline a credible path to re-accelerating services growth enough to help protect profit growth into the holiday quarter. The company has a history of turning new technologies into revenue streams, but AI agents are a different beast—they involve third-party developers and could raise questions about control and privacy.
What it means for investors
For everyday investors, this earnings call is about more than one quarter's numbers. It's a test of whether Apple can navigate a tricky transition: new leadership, a new product category, and a cost environment that's squeezing margins across the tech sector. The broader market backdrop is also worth watching, as tech earnings have been under scrutiny lately—some big names have disappointed, dragging stocks lower.
The iPhone Duo is a bold bet. At $1,999, it's Apple's most expensive iPhone ever, and it's entering a foldable market that's still niche. Early demand seems strong, but supply constraints could limit how many units Apple can ship in the crucial holiday quarter. If delivery waits stretch too long, some customers may cancel or switch to competitors.
On the AI front, Apple's "everyday people" pitch is a deliberate contrast to rivals that are racing to embed AI into everything. But investors want to see a path to monetization. The App Store commission idea is one possibility, but it's not confirmed, and it could face regulatory scrutiny. Apple has been under pressure from regulators over its App Store fees, so any new commission structure would need to be carefully designed.
Services growth slowing is a red flag for a company that has leaned on that segment to offset maturing hardware sales. If services can't re-accelerate, Apple's profit growth could become more volatile, especially as memory costs rise. That's why the AI agent question is so important—it could be the next big services revenue stream.
For now, investors should focus on what Ternus says about holiday-quarter guidance, iPhone Duo supply, and any concrete AI monetization plans. The wait times for the Duo have already eased, according to some analysts, which could be a positive sign for supply. But the bigger picture is whether Apple can maintain its growth story in a tougher environment.
As Apple's earnings loom, the company's ability to keep its place among the market's top performers is on the line. With a new CEO at the helm, Monday's call will be a defining moment for Ternus's leadership and for Apple's direction.
