Apple earnings become sideshow with new CEO ready to grab reins

John Ternus is taking over at a complex time for one of the world’s biggest companies, which is expected to debut a number of major products in upcoming months. Photo by Handout/Apple Inc./AFP via Getty Images

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Apple Inc. reports quarterly earnings after the close on Thursday, but investors will be largely looking past the numbers and seeking clues to incoming chief executive John Ternus’ strategic plans.

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The iPhone maker announced last week that Ternus, its current head of hardware infrastructure, will take over for Tim Cook on Sept. 1. That makes Apple’s fiscal second-quarter earnings report, outlook and conference call the first significant opportunity for Wall Street to get a reading on the new leader’s priorities. It isn’t clear if Ternus will appear on the call, and a company spokesperson declined to comment.

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“It isn’t really about the numbers,” said Anthony Saglimbene, chief market strategist at Ameriprise. “We want to know what the CEO transition looks like.”

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Ternus is taking over at a complex time for one of the world’s biggest companies, which is expected to debut a number of major products in upcoming months — notably a foldable iPhone. But while growth trends are improving, Apple has been grappling with skyrocketing costs for key components like memory chips and a volatile macro backdrop driven by the war in Iran and advances in AI that have minted stock market winners and losers.

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“Investors have reason to be excited about Ternus since he was an overseer of some of Apple’s most successful recent products, but his strategy will be a long-term story,” said David Wagner, portfolio manager at Aptus Capital Advisors, which has about US$14 billion in assets and holds Apple in a variety of portfolios. “In the short term, the impact of component costs will be the focal point.”

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Apple shares are up less than one per cent this year after a relatively disappointing 8.6 per cent gain in 2025. By contrast, the technology-heavy Nasdaq 100 Index is up 8.3 per cent in 2026 and the S&P 500 Index has gained 4.9 per cent. Apple’s stock was up 1.2 per cent on Thursday afternoon.

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While the company is accelerating development of AI-powered hardware devices and features, it has also seen a number of delays with its own artificial intelligence products. However, Apple hasn’t followed its megacap peers in sinking tens of billions of dollars into building out AI infrastructure, which has diminished the stock’s correlation to the rest of the tech industry.

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Earnings from the four biggest spenders — Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. — after the bell on Wednesday offered a mixed bag on that theme. For example, Meta shares were punished in extended trading after the Facebook parent raised its expectations for capital expenditures in 2026. Meanwhile Alphabet’s stock jumped as its cloud computing unit reported strong growth, signalling that its AI investments are starting to pay off.

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Wall Street expects Apple to report 19 per cent earnings growth on a 15 per cent jump in revenue, according to data compiled by Bloomberg. For the fiscal year, which closes at the end of September, analysts anticipate that revenue will climb 12 per cent, nearly twice last year’s 6.4 per cent pace and the fastest rate since 2021. However, that still trails the tech sector, which is expected to post revenue growth of more than 26 per cent in 2026, according to Bloomberg Intelligence data.