What is the benchmark for the September quarter?

  • Goldman Sachs expects Apple’s fiscal 2026 fourth-quarter revenue (the September quarter) to reach 113.6 billion dollars, up 11% year over year, at the upper end of the company’s 9%–11% guidance and close to the FactSet consensus of 113.4 billion dollars.
  • Earnings per share are expected to be 2.01 dollars, above the consensus of 1.99 dollars but below the bank’s previous forecast of 2.03 dollars. Gross margin is expected to be 47.8%, above the consensus of 47.5%, but includes a 1 percentage-point benefit from tariff refunds; the company’s gross-margin guidance excluding the refunds is 46%–47%.

Why would unit sales still fall if iPhone revenue grows 15%?

  • Goldman Sachs expects iPhone revenue in the September quarter to be 56.6 billion dollars, up 15% year over year and in line with consensus; this corresponds to a 4% decline in unit sales and a 20% increase in average selling price. The base iPhone 18 has been delayed until spring 2027, reducing initial shipments compared with the previous generation and concentrating sales more heavily in the Pro series; price increases for new and older models further raise the average price.
  • Demand has shown relative resilience. IDC estimates that global smartphone shipments fell 22% in the third quarter of 2026, while Apple’s fell 4% to 57.3 million units and its share rose from 18.2% to 22.4%.
  • Other hardware also relies on prices to offset pressure on unit sales: Goldman Sachs expects Mac unit sales to fall 12% and average prices to rise 13%, with revenue of about 8.7 billion dollars, flat year over year and weaker than consensus growth of 12%; iPad unit sales are expected to fall 9%, average prices to rise 17% and revenue to grow 6%.

Can premium demand and Duo support the upgrade-cycle thesis?

  • The global average delivery wait for the Pro series 42 days after preorders opened, as tracked by Goldman Sachs, was 24 days, slightly shorter than the previous generation’s 25 days at the same point and declining faster; Pro Max performed relatively well. Early Counterpoint data show that Pro-series sales in China during launch week grew 12% year over year.
  • Supply-chain media report that Apple increased Pro Max orders by 10%–15% and Duo orders by 30%, while cutting Pro orders by 10%–15%, leaving total Pro-series orders unchanged. On that basis, Goldman Sachs expects a higher share of higher-priced models, rather than a marked increase in total volume.
  • Delivery waits are also affected by inventory and supply. Management expects supply constraints in the September quarter to be significantly more severe than in the June quarter, with advanced chip manufacturing capacity the main bottleneck; third parties have also mentioned DRAM supply and Duo yield issues. The roughly 100-day wait early in Duo preorders also reflected launch enthusiasm.
  • Subsidies and installment plans support demand for higher-priced models: trade-in credits on eligible US carrier plans are worth up to 1199 dollars, enough to cover the Pro’s starting price; Apple Upgrade offers 12- or 24-month installments, reducing consumers’ immediate payment burden.

As App Store growth slows, what will sustain services revenue growth?

  • Goldman Sachs expects services revenue in the September quarter to reach 31.5 billion dollars, up 10% year over year. App Store growth of just 2% is offset by growth of 12% for iCloud+, 19% for AppleCare+, 22% for subscription services and 11% for TAC revenue from sources including search distribution.
  • Actual spending trends are also slowing: Sensor Tower reports that App Store spending rose 2% year over year in the third quarter, down from 3% in the second quarter; US spending fell 7%, while growth in China slowed from 10% to 8%. Competition from off-platform payments and commission adjustments in China, Japan and Brazil further constrain the revenue Apple earns from spending.

With profit expectations weak, why is the target price still rising to 390 dollars?

  • There is a timing gap between price increases and cost recognition: the September quarter benefits from price increases for only part of the quarter, but already bears higher memory costs. For the December quarter, Goldman Sachs expects revenue of 151.2 billion dollars, earnings per share of 2.88 dollars and a gross margin of 46.8%, all below consensus estimates of 152.2 billion dollars, 2.92 dollars and 47.1%, respectively.
  • Goldman Sachs expects iPhone revenue to grow 7% in fiscal 2027, supported by spring product launches, a full-year contribution from price increases and upgrade drivers such as Duo; but in its full-year model, total revenue grows 8.2%, earnings per share grow only 3.1%, and gross margin falls from 48.8% in fiscal 2026 to 46.6%.
  • The bank maintains its Buy rating and raises its 12-month target price from 360 dollars to 390 dollars, mainly by increasing its target price-to-earnings multiple from 37 times to 40 times, using its NTM+1Y earnings-per-share measure. Its fiscal 2026–2028 earnings forecasts are broadly unchanged on average; the higher valuation reflects greater confidence in the upgrade cycle following Duo’s launch.