Apple’s China Resurgence and Margin Math Take Center Stage as Q2 Earnings Land

Apple reports fiscal Q2 results amid China sales surge, new CFO Kevan Parekh's debut, and tight margins from rising chip costs. Revenue seen near $110B.

The iPhone maker steps into the earnings spotlight today, with the market bracing for a report that could reshape the narrative around its most important growth engine. Apple releases its fiscal second-quarter results after the closing bell on Thursday, and the stakes are unusually high — not just for the numbers themselves, but for what they signal about the company’s trajectory under a new finance chief.

Wall Street is looking for revenue of roughly $110 billion, a 15% year-over-year jump that would mark one of the strongest growth rates in recent quarters. But the consensus masks a wide divergence of opinion. Analyst estimates range from $107 billion to $115 billion, reflecting deep uncertainty about how the quarter actually played out. JPMorgan sits at the high end with a $112.7 billion forecast and earnings per share of $2.05, while the average EPS estimate clocks in at $1.95.

The biggest wild card is China. Independent data from the first calendar quarter of 2026 shows iPhone shipments in the country climbing roughly 20%, and Apple’s own sales data from the first nine weeks of the year points to a 23% surge in smartphone volumes. That rebound is being fueled by aggressive discounting on e-commerce platforms and subsidies on the base model iPhone 17, which have lured cautious consumers back into the fold. The company has also benefited from a pricing misstep by Asian rivals, who were forced to raise prices on their devices due to rising memory chip costs. Apple stepped into the gap and has managed to buck the broader market downturn in the region.

Goldman Sachs is leaning hard into the China story, projecting a 23% jump in iPhone revenue and a services haul of $30 billion. The bank reiterated its buy rating with a $330 price target, betting that the services division — with its gross margin north of 70% — will continue to act as a profit engine for the entire business. UBS takes a more measured view. Analyst David Vogt nudged his price target up to $287 but kept a neutral rating, citing longer-term risks such as potential product delays and declining shipment volumes.

On the cost side, the picture is more complicated. Apple has been absorbing higher component costs rather than passing them on to consumers, a strategy that protects market share but squeezes margins. Finance chief Kevan Parekh, who took over the role earlier this year, previously flagged pressure from tight supply of 3-nanometer chips and rising memory prices. The company is targeting a gross margin of 48% to 49% for the current quarter, and investors will be watching closely to see whether that range holds.

The guidance for the June quarter is likely to move the stock more than the actual results. Historically, Apple’s outlook has a stronger influence on the share price than the backward-looking numbers. For the quarter just ended, management had guided for revenue growth of 13% to 16%. Whether Apple hit that target — and how Parekh frames the coming months — will dictate trading on Friday.

The stock was changing hands at €231.10 ahead of the release, up roughly 23% over the past 12 months. The relative strength index sits at 27.6, a level that typically signals oversold conditions and could point to a bounce if the news is well received.

Apple has beaten earnings estimates in three of the last four quarters, giving the bulls some historical cover. But with a new finance chief at the helm, a volatile supply chain, and a China recovery that is still unproven over the long haul, this report carries more weight than most. The conference call later tonight will be the real test — not just of the numbers, but of the narrative.