Goldman Sachs previews Apple earnings: price increases support revenue as sales volumes and margins come under pressure
Goldman Sachs expects Apple's iPhone revenue to grow 15% year over year in the fourth quarter of fiscal 2026, while unit sales decline 4%. The iPhone Duo and the full-year effect of price increases are expected to support growth in the next fiscal year, while component costs and slower services growth constrain profitability.
Original source：Goldman SachsFirst published on Unhidea：Original source date：
Key takeaway
Goldman Sachs is optimistic about fiscal 2027 growth from new iPhones and price increases, but its model also shows pressure on unit sales and rising costs, with revenue growth failing to translate into equivalent profit growth.
Where do fourth-quarter expectations differ?
Goldman Sachs forecasts revenue of 113.6 billion dollars for the fourth fiscal quarter ended September 2026, up 11% year over year. That is close to the FactSet consensus of 113.4 billion dollars and at the upper end of Apple's growth guidance of 9%–11%. It expects earnings per share of 2.01 dollars, above the consensus of 1.99 dollars.
The bank expects an overall gross margin of 47.8%, above the consensus of 47.5%, including a benefit of approximately 1 percentage point from tariff refunds. Higher component prices have raised costs, while iPhone price increases contributed benefits for only part of the quarter.
For the next fiscal quarter ending December 2026, Goldman Sachs forecasts revenue of 151.2 billion dollars and earnings per share of 2.88 dollars, both below the consensus estimates of 152.2 billion dollars and 2.92 dollars, respectively. It expects a gross margin of 46.8%, below the consensus of 47.1%.
Why is iPhone revenue growth accompanied by declining unit sales?
Goldman Sachs expects fourth-quarter iPhone revenue of 56.6 billion dollars, up 15% year over year and in line with consensus. Its model assumes unit sales fall 4% and the average selling price rises 20%. Price increases of 100 dollars each for the Pro and Pro Max, higher US prices for older models, and the absence of the standard iPhone 18 during the quarter shifted the sales mix toward higher-priced models.
Supply and launch timing also weigh on unit sales: the delayed launch of the standard model means initial channel shipments of the new models are smaller than those for the full previous-generation lineup. Management expects supply constraints for the iPhone, Mac and iPad to intensify significantly quarter over quarter in the fourth fiscal quarter, with advanced process capacity used for Apple chips as the main bottleneck.
Mac and iPad show a similar divergence between volume and price: Goldman Sachs expects fourth-quarter unit sales to fall 12% and 9% year over year, respectively, while average selling prices rise 13% and 17%. Mac revenue is expected to be flat, below consensus growth of 12%; iPad revenue is expected to grow 6%, above the consensus of 1%.
Can demand for more expensive new models continue?
Goldman Sachs' delivery-time tracker shows that during the first 42 days after orders opened for the iPhone 18 Pro series, the global weighted-average wait was 24 days, slightly below the 25 days recorded for the iPhone 17 Pro series over the same period. The Pro Max held up relatively better. Delivery times are also affected by channel inventory and supply.
Other early indicators are relatively resilient: Counterpoint data show that first-week sales of the iPhone 18 Pro series in China rose 12% year over year. Supply-chain reports indicate that Pro Max orders were raised by 10%–15% and Pro orders cut by 10%–15%, leaving total Pro series orders unchanged; Goldman Sachs believes this favors a higher share of higher-priced models.
Goldman Sachs expects iPhone revenue to grow 7% in fiscal 2027, driven by upgrade demand from the Duo, new products including the standard iPhone 18 launching in spring 2027, and the full-year effect of price increases. US carrier subsidies and the Apple Upgrade installment plan help ease consumers' purchase costs.
Can services growth offset cost pressure?
Goldman Sachs expects fourth-quarter services revenue of approximately 31.5 billion dollars, up 10% year over year and in line with the consensus growth rate. Growth in iCloud+, AppleCare+ and subscription services partly offsets the App Store slowdown.
The bank expects App Store revenue to grow 2% year over year in the fourth fiscal quarter, down from 3% in the previous quarter. Sensor Tower data show App Store spending rose 2% year over year in the third calendar quarter of 2026, down from 3% in the second calendar quarter. Competition from payments outside apps and changes to commission structures in China, Japan and Brazil also weigh on growth.
Even after accounting for price increases and new products, Goldman Sachs expects Apple's overall gross margin to decline from an estimated 48.8% in fiscal 2026 to 46.6% in fiscal 2027, with revenue growing 8.2% but earnings per share rising only 3.1%. Goldman Sachs maintained its buy rating and, because it is more optimistic about Duo-driven upgrades, raised its 12-month price target from 360 dollars to 390 dollars, with the corresponding valuation multiple rising from 37 times to 40 times.
