Apple released its earnings report, and while various metrics exceeded expectations, the stock still fell. Let's look at the data first. Apple announced its earnings for the fourth quarter of fiscal year 2026. Note that this is the quarter ending September 26th, not the fourth quarter of the calendar year. Revenue for this quarter was $114.48 billion, a year-over-year increase of 12%; net income was $30.71 billion, a year-over-year increase of approximately 12%; diluted EPS was $2.10, a year-over-year increase of 14%. Wall Street had expected revenue of around $113.4 billion and EPS of around $1.99, and Apple exceeded expectations in both areas. Full-year revenue was $478.8 billion, a year-over-year increase of 15%, and net income was $132.2 billion. Looking at this report alone, Apple delivered a very impressive performance. However, experienced analysts never look solely at total revenue when analyzing financial reports. First, the iPhone remains Apple's biggest cash cow. iPhone revenue for this quarter was $57.58 billion, a year-over-year increase of approximately 17.5%. Mac revenue was $10.79 billion, a year-over-year increase of 23.7%. Services revenue reached $31.57 billion, a 9.8% year-over-year increase, setting a new record. However, iPad revenue was $6.23 billion, a 10.4% year-over-year decrease; wearables, home, and accessories revenue was $8.3 billion, a 7.9% year-over-year decrease. This reveals a key issue: Apple's growth isn't driven by a simultaneous surge across all businesses, but primarily by the iPhone, Mac, and services. The services business, in particular, boasts a gross margin of around 76%. Hardware drives users into the ecosystem, while services generate continuous revenue. This is Apple's true strength. Secondly, the biggest concern in the financial report is actually rising memory prices. Apple's gross margin this quarter was 47.9%, which looks good. However, a detail is easily overlooked: tariff refunds contributed approximately 1 percentage point to Apple's gross margin and $0.05 to EPS. In other words, if this one-off benefit is excluded, the true operating profit margin needs further observation. More problematic is that AI data centers are consuming significant memory capacity, memory chip prices are rising, and smartphone manufacturers are also beginning to feel the cost impact. While Apple possesses strong bargaining power with its supply chain, it cannot remain completely unaffected. Management's gross margin guidance for the next quarter is only 45%-46%, a significant decrease from 47.9% this quarter. This is what truly makes the market uncomfortable. Third, AI may be key to Apple's next round of growth, but it hasn't fully materialized yet. Microsoft, Google, and Meta are all investing heavily in AI infrastructure. Apple's approach is different; it aims to integrate AI into the iPhone, Mac, and the entire ecosystem. This approach has advantages, as it doesn't require completely replicating the asset-heavy investment models of other tech companies. However, the questions are also very real: Will AI actually drive users to upgrade their phones? Will it make users willing to pay for higher-end hardware? If AI merely adds a few features without bringing significant growth in replacement cycles and service revenue, then the capital market won't continue to buy into the AI story. Finally, why did the stock price fall despite better-than-expected earnings? I believe the core reason is that the market is starting to trade on the next quarter, not the current quarter that has already ended. Apple projects revenue growth of 7%-10% year-over-year for the December quarter, with services growth expected to be 8%-9%, while gross margin may decline to 45%-46%. Adding to this, rising memory costs, investment in AI servers, and supply constraints on some new products will naturally lead investors to reassess profit margins for the coming quarters. Another noteworthy change is that this is the first earnings report since John Ternus took over as CEO. Apple is currently in a transitional phase between old and new cycles. Apple's biggest advantages remain its massive global user base of active devices, strong brand premium, and service ecosystem. However, its challenges are also clear: can hardware growth be sustained? Can AI create new demand for upgrades? And will rising memory costs erode profits? A good company doesn't mean it's worth buying at any price. This earnings report proves Apple is still very profitable, but it hasn't yet proven that it has found its second growth curve in the AI era. Next quarter, pay attention to two key metrics: the impact of memory prices on gross margin and the actual sales performance of iPhones in the December quarter. These two metrics are more important than simply focusing on record-breaking revenue.