The tariffs imposed by the Trump administration had the paradoxical effect of boosting Apple’s second-quarter performance. Apple, which announced earnings that exceeded market expectations, declared its intention to continue investing in artificial intelligence (AI).
On July 31 (local time), Apple reported a revenue of $94.44 billion and an earnings per share (EPS) of $1.57 for the second quarter of the year (fiscal third quarter). Both the revenue and EPS surpassed Wall Street’s expectations of $89.53 billion and $1.43, respectively, as compiled by market research firm LSEG. Revenue increased by 9.6% compared to the same period last year, marking the highest growth rate since the fourth quarter of 2021 (October-December). Global sales of Apple’s flagship product, the iPhone, increased by 13.5% to $44.6 billion compared to the same quarter the previous year.
The “Trump tariffs” contributed to Apple’s increased revenue. Apple CEO Tim Cook stated that about 1 percentage point of the revenue growth came from customers pre-purchasing products due to concerns about future tariffs. In China, including Hong Kong and Taiwan, Apple saw its sales increase by 4% year-on-year to $15.37 billion. Cook mentioned that the Chinese government’s subsidies for certain products aided Apple’s performance improvement.
During a conference call after the earnings release, Cook emphasized that Apple is focusing its entire capacity on strengthening its AI capabilities. Apple has been perceived as lagging behind other big tech companies in the generative AI development race. Recently, some key AI researchers have left for competing companies like Meta.
Cook stated that Apple will “continue to invest in AI” and is actively open to mergers and acquisitions (M&A) that could accelerate the technology roadmap. He mentioned that Apple has already acquired seven small companies this year and that larger acquisitions are possible. Cook also noted that Apple is focusing on developing a personalized “Siri,” its voice assistant, and plans to release this feature next year. He added, “Our goal is to implement AI features that prioritize privacy and are seamlessly integrated across the platform.”
Apple is also venturing into AI hardware development, separate from its iPhone efforts. According to U.S. IT media outlet 9to5Mac, Apple is developing AI-powered smart glasses with a target launch date in 2026.