Apple shares fell by under 1% in after-hours trading after quarterly results beat forecasts. The company reported adjusted EPS of $2.01, $0.07 above consensus, on revenue of $111.2 billion, $1.6 billion above estimates.
iPhone revenue came in just under $57 billion versus an IBES estimate of $57.2 billion. Apple said iPhone sales were limited by shortages of “advanced node chips” and noted reduced flexibility in the supply chain.
Supply Constraints And China Strength
The report linked constraints to strong demand for advanced chips produced mainly by TSMC and to tight memory supply tied to AI data-centre buildouts. Revenue from Greater China was $20.5 billion, $1.6 billion above consensus.
iPhone revenue rose nearly 22% year on year, while Services revenue rose 16%. Mac revenue increased 6%, Wearables 5%, and iPad revenue about 8%.
Apple raised its quarterly dividend by 4% to $0.27 and approved a new $100 billion share buyback plan. Tim Cook is set to depart on 1 September.
Technically, the 50-period SMA near $269 is cited as support, with the 200 SMA just below $261. A weekly close above $272 is referenced as a level that could shift momentum.
Options Positioning After Volatility Drop
Given the market’s muted reaction, we see the strong demand and capital return program being weighed down by supply chain fears. The significant drop in implied volatility after the earnings announcement makes options pricing more attractive now. This creates an opportunity for us to position for the next move without overpaying for uncertainty.
The guidance on “advanced node chip” shortages is a critical headwind that will likely cap near-term upside. We know Taiwan Semiconductor’s 3nm and 2nm production lines are operating at over 95% capacity, with major AI firms having booked out supply well into next year. This means Apple’s ability to meet the extraordinary demand for the iPhone 17 will be genuinely tested in the coming quarters.
Similarly, the memory chip constraint is not a temporary issue, as the buildout of AI data centers has caused a surge in demand for high-bandwidth memory. This has driven prices for the high-end DRAM used in iPhones up by nearly 20% since the start of the year. This situation directly threatens both production volume and profit margins for Apple’s most important product.
On the other hand, the surge in demand from Greater China cannot be ignored, especially when we look back at the widespread concerns about a slowdown we saw through 2024 and 2025. This $1.6 billion revenue beat suggests Apple’s brand power in the region is proving far more resilient than anticipated. This strong fundamental demand provides a solid floor under the stock price.
For the coming weeks, we should watch the $269 support level closely, as it represents the 50-period moving average. A decisive break below this level could trigger further selling, making put options or put debit spreads targeting the $261 area attractive. If the stock holds this support, it may signal that the market is prioritizing the strong demand and buyback program over the supply issues.
Until the stock breaks its current tight range, strategies that benefit from sideways movement, such as selling iron condors, could be effective. However, we should be prepared for a breakout, as the tension between massive demand and throttled supply will eventually resolve. A weekly close above the $272 trendline would be a bullish signal, suggesting the market believes Apple can navigate the component shortages.
