Investments in generative AI leads to rising costs for Apple, Tim Cook says 'we're investing a lot'

Apple's shares fell by approximately 2% after the company forecasted a potential continuation of the sales slump in the current quarter. Despite surpassing many analysts' predictions for Q3 sales and profit targets, the company reported a 1.4% drop in revenue to about $81.8 billion for the quarter ending July 1. However, earnings per share rose by 5% to $1.26, exceeding analysts' expectations. Apple's CFO, Luca Maestri, anticipates a year-over-year revenue performance in the company's fourth fiscal due to growth in its services segment.

Apple has increased its research and development spending to $22.61 billion in the current fiscal year, an increase of around $3.12 billion from the previous year. This increase is attributed to the company's work on generative AI technology. Apple CEO Tim Cook stated that the company would continue to invest and innovate in a wide range of AI technologies to enrich people's lives.

Key takeaways:

Apple shares fell by approximately 2 percent due to a predicted sales slump in the current quarter, despite beating many analyst predictions for sales and profit targets in the third quarter.
Apple's revenue for the quarter ended July 1 fell 1.4 percent to about $81.8 billion, while earnings per share rose 5 percent to $1.26, higher than analysts' expectations.
Apple's research and development spending has increased to $22.61 billion in the current fiscal year, around $3.12 billion more than the last year, largely due to work on generative AI technology.
Despite weaker-than-expected iPhone sales, growth in China and strong sales in the services segment like Apple TV have helped offset some of those numbers, with Apple expecting a rise in iPhone sales in the fourth quarter.

Investments in generative AI leads to rising costs for Apple, Tim Cook says 'we're investing a lot' | Mint

Key takeaways:

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