Apple’s June-quarter results exceeded expectations, with revenue up 10% to $94 billion. iPhone revenue rose 13% to $44.6 billion, and services revenue increased 13% to $27.4 billion. Tariffs impacted gross margins, but Apple’s main products are exempt for now. The company plans to invest more in AI technology, but improvements are needed.

Despite tariff risks, Morningstar raised Apple’s fair value estimate to $210 from $200. The firm sees short-term benefits from strong demand and potential price increases to offset tariffs. The iPhone 17 family is expected to launch in September with new features, but future growth may be impacted by pull-in demand from 2025.

Morningstar predicts low-single-digit iPhone unit growth in fiscal 2026, even with a new form factor. The firm notes potential risks if Apple loses its tariff exemptions, especially with imports from India. Apple’s AI software may need significant improvements to remain competitive in the long term.

Read more at Morningstar: Strong iPhone Beat Brings Our Valuation Up and Tariff Costs Prove Light for Now