Why Did Apple Sell Off Despite Beating Earnings Expectations? Slowing Gross Margin Guidance, Underwhelming China Performance, and High Memory Costs Weighed on Its Stock Price.

According to data from the BIT Stock Platform, Apple closed down 1.83% this morning, and fell an additional 2.5% in after-hours trading. Why was it sold off by the market despite beating earnings expectations? This morning, Apple released its Q4 FY2026 financial results: revenue hit $114.48 billion, up 11.7% year-over-year; EPS stood at $2.10, both metrics exceeded analyst forecasts. iPhone revenue surged 17.5% YoY to around $57.6 billion, and Mac sales rose nearly 24% YoY, delivering strong performance. However, Greater China revenue, while up 21% YoY to approximately $17.5 billion, still missed analyst estimates by around 6.5%. The services segment’s growth slowed to roughly 9.8%, its lowest level in nearly three years, and the company’s guidance for next quarter’s services revenue growth is only 8%-9%, significantly below market expectations. More critically, management guided next quarter’s gross margin to fall to 45%-46%, lower than analysts’ expected ~46.3% and a notable drop from the current quarter’s 47.9%, driven by rising storage costs and AI-related expenses. Although next quarter’s revenue growth guidance of 7%-10% is above expectations, against the backdrop of Apple’s sharp stock rally in recent months and already high valuation, the underperformance in China, slowing services growth, and margin pressure have triggered investor profit-taking.