Apple's Stellar Quarter: iPhone 16's AI Boost Sparks Surprising Success

Apple outperformed Wall Street's expectations in its fiscal fourth quarter, largely due to strong early sales of the iPhone 16, which is designed for AI features. Despite missing targets in other product lines and China sales, Apple's revenues hit $94.93 billion, with iPhone sales rising 5.5%.

Apple exceeded Wall Street's sales and profit estimates for its fiscal fourth quarter, driven by robust initial sales of the iPhone 16. The new phone, infused with advanced AI capabilities, pushed Apple's sales to $94.93 billion, surpassing the projected $94.58 billion. Earnings per share reached $1.64, topping forecasts of $1.60.

Apple's primary revenue driver, the iPhone, saw sales climb by 5.5% to $46.22 billion, outpacing market expectations. Nonetheless, some Apple product lines fell short of expectations and China sales lagged, contributing to a 1.4% drop in Apple shares during extended trading.

iPhone 16, launched in late September, showed faster growth than its predecessor. Apple's CEO, Tim Cook, noted rapid adoption of the new Apple Intelligence features among users. As competition with tech giants like Microsoft and Meta intensifies, Apple's capital expenditures rose significantly, focusing on expanding its AI and computing capacity.

(With inputs from agencies.)