All week we followed the four giants and what they are paying for AI infrastructure. Microsoft at roughly $190 billion a year, Meta at $31 billion a quarter with a margin down 12 points, Amazon at $173 billion over twelve months with free cash flow turned negative.
And Apple, which did not build data centers on that scale, tonight reported the strongest June quarter in its history.
What Was Reported
| Metric | June quarter 2026 | Year ago | Change |
|---|---|---|---|
| Revenue | $109.4 billion | $94.0 billion | +16% |
| Diluted EPS | $2.02 | $1.57 | +29% |
| Gross margin | 50.1% | - | - |
Consensus stood at $1.88 and revenue of about $109.0 billion.
CEO Tim Cook: "Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment. At WWDC26, we were thrilled to introduce the all-new Siri AI."
The Asterisk That Must Be Marked: Tariff Refunds
Apple states it itself, in the opening paragraph:
"Company gross margin was 50.1 percent, including a favorable impact of approximately 2 percentage points from tariff refunds. Diluted earnings per share was $2.02, up 29 percent year over year, and included a favorable impact of $0.11 from tariff refunds."
Which means neutralizing it, exactly as we neutralized the markup at Amazon
| Metric | As reported | Excluding tariff refunds |
|---|---|---|
| EPS | $2.02 | about $1.91 |
| Beat against the $1.88 consensus | +14 cents | +3 cents |
| Gross margin | 50.1% | about 48.1% |
The real beat is roughly three cents, not fourteen.
This does not mean the profit is not real - a tariff refund is cash received. But it is a one-time event stemming from a change in trade policy, not from the business - and it will not repeat next quarter in the same form.
(The calculation is our approximation based on the figures the company published itself.)
The Breakdown: Three Records and One Weak Line
| Product line | June quarter 2026 | Year ago | Change |
|---|---|---|---|
| iPhone | $54.25 billion | $44.58 billion | +21.7% |
| Mac | $10.35 billion | $8.05 billion | +28.7% |
| Services | $30.74 billion | $27.42 billion | +12.1% |
| Wearables, Home and Accessories | $7.88 billion | $7.40 billion | +6.5% |
| iPad | $6.19 billion | $6.58 billion | -5.9% |
iPhone, Mac and Services all set June-quarter records.
iPhone at 21.7% is the central figure - this is a seasonally weak quarter, three months before the next model launch, and it still grew at that rate. And Mac at 28.7% is the fastest-growing line of all.
iPad is the only line that declined, minus 5.9%.
And China - the Story That Turned
| Region | June quarter 2026 | Year ago | Change |
|---|---|---|---|
| Americas | $45.78 billion | $41.20 billion | +11.1% |
| Europe | $29.40 billion | $24.01 billion | +22.4% |
| Greater China | $18.82 billion | $15.37 billion | +22.4% |
| Japan | $6.55 billion | $5.78 billion | +13.4% |
| Rest of Asia Pacific | $8.87 billion | $7.67 billion | +15.6% |
Why China is the number that changed most in Apple's story
For about two years, Greater China was Apple's negative story. Consecutive declines, competition from domestic manufacturers, and regulatory pressure - and every report opened with the question of when it would stop.
And now a second consecutive quarter of sharp acceleration: in the March quarter China grew 28% year-over-year, and this quarter 22.4%.
And what makes that significant beyond the number: China is the market where Apple competes against particularly strong domestic brands, and it is also the most geopolitically sensitive. A return to high double-digit growth there says the product is winning, not that the market is growing.
And all five regions grew double digits - Cook notes it explicitly, and that is rare.
And the Question of the Whole Week: Who Was Right
This is where this report reaches beyond the company itself.
In the capex-versus-depreciation article we set Apple against the other three: it is the only one that did not build AI infrastructure on the scale of tens of billions per quarter. And we noted the market had already priced that - Apple +24% year-to-date, Amazon -2% - before either had reported.
Tonight both reported, and results can be compared rather than just valuation:
| Apple | Amazon | |
|---|---|---|
| Revenue growth | +16% | +20% |
| Gross margin | 50.1% | - |
| Free cash flow (twelve months) | positive and substantial | -$11.6 billion |
| Source of headline profit | the business (less 11 cents of refunds) | $3.80 of $5.75 is a markup |
Amazon grew faster on the top line. Apple earned from the business.
But you cannot conclude from this that Apple 'was right'
The central argument against Apple was never about this quarter - it is about the next decade.
Whoever builds AI infrastructure today is buying capacity for the years ahead. Apple chose to buy capability rather than build it, and its bet is that it can rent compute cheaply from others, or that on-device AI will be enough.
One quarter does not settle a decade-long bet. What it does show is that the cost of waiting has been zero so far - and that meanwhile, while the others pay, Apple collects.
And the announcement of the new Siri is the other side of that equation: Apple must prove the product meets the standard, or waiting turns into falling behind.
The Bull Thesis
Whoever reads it positively will point to the breadth: June-quarter records in revenue and EPS, three product lines at records, and double-digit growth in all five regions. This is not a one-product quarter.
Beyond that: China is back - 22.4% after two years of declines. And iPhone at 21.7% in a seasonally weak quarter hints at a strong cycle into the next launch.
And the financial positioning: Apple generates cash from the business rather than burning it on infrastructure - and in a rate environment that is not easing, that is worth more.
The Bear Thesis
Whoever reads it critically will note first that 11 cents of EPS and two points of margin are tariff refunds - a one-off stemming from trade policy. The real beat is three cents.
Second, Services grew 12.1% - slower than hardware, and contrary to the prevailing view that Services is the growth engine. It is still the most profitable segment, but it is not the accelerant.
Third, iPad fell 5.9%, and Wearables grew only 6.5% - the two lines meant to diversify away from iPhone are not doing so.
And fourth, the new Siri was announced, but not measured. The report contains no figure on adoption, revenue or impact - at this stage it is a promise, not a result.
The debate in one line
The bulls see June-quarter records in revenue and profit, iPhone +21.7%, Mac +28.7%, China +22.4% and double-digit growth in every region - at a company generating cash rather than burning it. The bears see 11 cents of profit from one-time tariff refunds, Services growing slower than hardware, iPad declining, and an AI strategy not yet measured by any number. Both sides are reading the same report.
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
What catches me in this report is that it closes the week exactly where it opened.
All week we followed what the giants are paying for AI: Microsoft at $190 billion a year, Meta with a margin down 12 points, Amazon with negative free cash flow. And Apple, which did not pay, reported the strongest June quarter in its history.
But I am careful not to draw more from that than it contains. One quarter does not settle a decade-long bet, and the argument against Apple was never about this quarter - it is about what happens when the capability it chooses to rent becomes a bottleneck.
What can be said: the cost of waiting has been zero so far. While the others built, Apple collected. That is worth something.
And the number that genuinely surprised me is China. 22.4%, after 28% the prior quarter, in a market that was the problem for two years. And in China Apple does not benefit from a rising tide - it fights strong domestic brands. Growth like that there says the product is winning, and that matters far more than the same percentage in America.
And what I hold as a caution: the tariff refunds. 11 cents of $2.02, and two points of gross margin. I neutralized Amazon's Anthropic markup, and I have to neutralize the same class of item here - otherwise I am measuring two companies with two different rulers. The real beat is three cents.
And what I will watch: Services. 12.1% is slower than hardware, and that inverts the story Apple has told for years. If hardware is carrying the growth, Apple is back to being a devices company - and a devices company is priced differently from a platform.
Summary
Apple reported revenue of $109.4 billion (+16%) and diluted EPS of $2.02 (+29%) - June-quarter records on both lines - against a $1.88 consensus. iPhone jumped 21.7%, Mac 28.7%, Services 12.1%, and Greater China 22.4% - with double-digit growth in all five regions.
And the asterisk: 11 cents of EPS and two points of gross margin come from tariff refunds. Excluding them, EPS is about $1.91 - a beat of roughly three cents, with a gross margin near 48.1%.
And beyond the company: this is the only one of the four giants that did not build AI infrastructure on a tens-of-billions-per-quarter scale - and it finished the week with the strongest quarter in its history. The question for the investor is not whether waiting has paid off so far - it has - but what happens when the capability Apple chooses to rent becomes scarcer and more expensive.
Sources: Apple's official results release for the third quarter of fiscal 2026, ended June 27, 2026 (July 30, 2026), as filed with the U.S. Securities and Exchange Commission on Form 8-K, including revenue, gross margin and the stated impact of tariff refunds, diluted earnings, the product-line and geographic breakdowns, the dividend and remarks by CEO Tim Cook and CFO Kevan Parekh; year-ago figures from the results release of July 31, 2025; analyst consensus ahead of the report. The calculation of earnings and margin excluding tariff refunds is an approximation based on the figures the company published. Data accurate as of the time of writing. The chart is shown in real time via TradingView. Nothing herein constitutes a forecast, recommendation or advice - see the full disclaimer at the bottom of the page.