Veteran analyst spots unexpected star in Apple's earnings report

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Veteran analyst spots unexpected star in Apple's earnings report originally appeared on TheStreet.
Apple () just crushed it with its Q3 numbers.
However, beyond the headline glow, Wedbush's Dan Ives spotted something everyone else might be missing.
It wasn't just about iPhone or AI, but more about Apple's future, and the high-stakes it's involved in at this time.
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In the next few quarters, we might see that tailwind play out even more, and nudge the Cupertino giant back in Wall Street's good graces, potentially kickstarting a powerful rally.
Apple's Q3 shows broad strength with record revenue, margins, and an iPhone milestone
Apple posted a remarkably strong quarterly report, posting record Q3 sales of $94.04 billion, up 10% year-over-year.
Similarly, its diluted EPS of $1.57 represented an eye-catching 12% gain.
Also, net income came in at a superb $23.43 billion, highlighting operational strength, despite external cost pressures.Services revenue came in at an all-time high of $27.42 billion, jumping 13% year-over-year. iPhone sales rose 13.5% to $44.58 billion, led by demand resilience, while marking a major milestone in the shipment of Apple's three billionth iPhone.
Mac sales bounced 15% to $8.05 billion, somewhat offsetting the 8% drop in iPad revenue, which landed at $6.58 billion. Additionally, wearables, home, and accessories added $7.4 billion to the top line.
Gross margin surged to 46.5%, despite the $800 million tariff-related hit, underscoring robust leverage across hardware and services.
Regional performance was a critical driver, with revenue in Greater China rising 4%, reflecting sequential improvement.
Looking ahead, Apple expects to post mid-to-high single-digit top-line growth in Q4, with services projected to maintain its 13% clip.
Gross margin guidance is impeccable, coming in between 46% and 47%, even with Apple preparing for another $1.1 billion in tariff impact.
Nevertheless, Apple enters the back half of FY2025 with healthy momentum and multiple growth catalysts.
Wedbush calls China 'star of the show' as Apple clears the bar in Q3
Following Apple's strong Q3 earnings print, Wedbush didn't hold back in saying that the iPhone beat in China was 'the star of the show.'
Analyst Daniel Ives hailed the results as 'much better than expected,' with Apple posting comfortable beats across both lines on the back of standout strength in iPhone and services.What stood out was the rebound in Greater China.
Apple reported $15.37 billion in sales from the region, up 4% year-over-year, its first return to positive expansion in the past several quarters.
'This was a major step in the right direction for Cook and Cupertino,' Ives said, noting that the Chinese performance blew past Wedbush and Street expectations.
Government stimulus also helped drive the surprise upside, especially in iPhone sales, which leapt to $44.58 billion globally, smashing the $40.29 billion estimate.
On top of that, Wedbush reaffirmed its Outperform rating and $270 price target.
Still, Ives struck a cautionary note on AI.
He's warned that Apple must move much quicker in the'4th Industrial Revolution,' suggesting that embracing external partnerships with the likes of Perplexity could help close out the innovation gap.
Nevertheless, Wedbush's broader thesis is that Apple remains a durable tech leader with plenty of room to reaccelerate.
Tim Cook says China is stabilizing, and Apple Intelligence is already reshaping the user experience
Tim Cook leaned in bullishly as he addressed the China question in Apple's Q3 earnings call.
Cook acknowledged a 2% year-over-year drop in the quarter but said that, excluding foreign exchange headwinds, results were mostly flat.
Also, he noted tremendous progress compared to the December quarter, when revenue had dropped 11%.
Cook credited recent stimulus support. 'I do think the subsidies played a favorable impact on the results.'
However, in complementing Apple's deeper structural wins, he highlighted product momentum, noting that Macs, iPads, and Apple Watches draw in mostly first-time buyers.The iPhone is holding firm, too.
'iPhone was the top two models in urban China, and iPad was the top two tablets in urban China,' Cook said.
To support that argument, research from Canalys shows that Apple may be turning a corner in China.
iPhone shipments surged 4% last quarter, clocking its first gain since late 2023, even as overall smartphone sales slipped.
On AI, Apple put the spotlight on delivery.
'We built our own highly capable foundation models,' Cook said, highlighting features like Genmoji, Image Wand, and Writing Tools now live across multiple languages, backed by strong privacy.
As for Siri's big upgrade? It's still cooking. 'We need more time,' Cook admitted.
Siri delays stoke concern, but Apple's playing a longer AI game
Tim Cook didn't sugarcoat the timeline on Siri, especially as Apple looks to meet a lofty quality bar.
Investor sentiment surrounding the delay has been mostly mixed over the past several months.
Citi warns that delays in AI-Siri integration could negatively impact iPhone upgrade intent while trimming near-term projections.
UBS also flagged 2025 as light on transformational AI growth unless Siri delivers.
Nevertheless, if Apple nails execution, some experts feel the Siri relaunch will be a great AI growth catalyst for the iPhone and services stack.
A big part of Apple's competitive edge is its privacy-first posture, which should resonate with consumers wary of cloud-based assistants.
There's also strategic movement.
Apple is looking to explore external model integrations with ChatGPT or Claude to boost Siri's capabilities.
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Hence, despite the delay in the flagship update, Apple Intelligence has been quietly expanding, with over 20 features live and usage metrics trending up.
Hence, if Siri's reboot lands as expected in 2026, it could add new layers to Apple's illustrious growth story.
Veteran analyst spots unexpected star in Apple's earnings report first appeared on TheStreet on Aug 1, 2025
This story was originally reported by TheStreet on Aug 1, 2025, where it first appeared.
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