Apple overcomes Trump’s trade war, slow start in AI to deliver surprisingly strong quarter

SAN FRANCISCO (AP) — Apple shook off a thicket of tariffs and a botched entry into artificial intelligence to accelerate its revenue growth during its springtime quarter, but the trendsetting tech company still faces a bumpy road ahead that could lead to higher iPhone prices.

The April-June results released Thursday came against a backdrop of adversity that has been raising worries about the trajectory of a longtime tech kingpin that expects to absorb a setback of nearly $2 billion from the tariffs that President Donald Trump has already imposed and others in the pipeline.

Despite the doubts, Apple remains a moneymaking machine.

The Cupertino, California, company earned $23.4 billion, or $1.57 per share, during its fiscal third quarter, a 9% increase from the same time last year. Revenue climbed 10% from a year ago to $94 billion. The company’s iPhone sales surged 13% from a year ago to $44.6 billion. In another positive development, Apple’s business in China showed signs of snapping out of a prolonged malaise with a 4% bump in revenue from the same time last year.

All those numbers were well above the analyst projections that steer investors, helping to boost Apple’s recently slumping stock price by about 3% in extended trading. But the unexpectedly solid performance doesn’t necessarily mean it’s smooth sailing ahead for Apple.

Tallying the toll of Trump’s tariffs

Trump’s trade war targeting foreign-made products such as the iPhone and Apple’s stumbling start in the pivotal transition to AI is causing investors to question if the company will remain at the tech forefront as the industry moves into a new era.

Before Thursday’s report came out, Apple’s stock price had plunged by 17% so far this year to wipe out more than $600 billion in shareholder wealth and knock the company off its perch as the world’s most valuable company. Meanwhile, the shares of AI chipmaker Nvidia have surged 32% this year and the shares of AI pacesetter Microsoft have gained 27%, propelling the market value to $4 trillion.

Even though Apple remains highly profitable, the tariffs that Trump has already imposed on China and other countries cost the company $800 million during the past quarter, and CEO Tim Cook told analysts during a conference call that the fees would exact an additional toll of $1.1 billion during the July-September period. The company also predicted its revenue for July-September period would increase at a slightly slower pace than the past quarter.

Cook indicated the financial damage from the tariffs could have been much higher, telling analysts most of the components in iPhones and other Apple products are still shielded by temporary exemptions that the Trump administration granted most electronics in mid-April.