Apple earnings preview: Q3 2026

Apple's (NASDAQ: AAPL) total revenue expected for fiscal Q3 have ticked up since late January but are flat at $108.1 billion from last quarter, according to Visible Alpha consensus. Sentiment seems to reflect a view that iPhone buying is stable with improvements in China and users continuing to upgrade in the US. Since late January, FY 2026 iPhone units have ticked up to 258 million, up 18 million units from January 2025. Currently, Q3 is expected to deliver $53.0 billion in iPhone sales and $251.2 billion in FY 2026 and $274.4 billion in FY 2027. Overall, large looming questions remain about the supply chain; however, iPhone expectations are continuing to show positive momentum this quarter and beyond, driven by upgrades.

Expectations for the high-margin Services segment remained stable for Q3 at $31.4 billion. The gross margin for the Services segment is over 70%, significantly higher than the 37% gross margin for Products. Given the large installed base, we are looking forward to what the company says in the Q3 earnings release about growth in Services and the role of Apple Intelligence in FY 2026. Apple has not invested heavily in AI infrastructure. The company’s CapEx has remained stable.

With CEO Tim Cook stepping down and new leadership taking the reins. The outlook for the critical Back to School and Holiday selling seasons will be an important read of the business segments. In addition, the visibility of Apple Intelligence enhancements and new product roll outs will be a critical focus. In addition, will Apple use its over $100 billion cash position to buy back stock and increase dividends or make an acquisition?

Apple stock has been up 11.3% since May and 26.3% since January 2026. The consensus P/E for 2027 is 34x with a target price of $337 with an implied return of 3.5%. Could the Q3 release and outlook confirm the upgrade cycle and drive further outperformance in the stock?