Goldman Sachs Previews Apple (AAPL.US) Q4 Earnings: iPhone Duo/18 Series to Drive New Fiscal Year Growth, Raises Target Price to $390

According to Zhitong Finance APP, Apple (AAPL.US) will announce its FY2026 Q4 financial results on the morning of November 3, Beijing time. Goldman Sachs released its latest preview report, forecasting Apple’s Q4 revenue at $113.598 billion, a YoY increase of 11%, about $155 million higher than the FactSet consensus, positioning it at the upper end of the company’s 9%–11% guidance; expected EPS is $2.01, higher than the consensus of $1.99 — revenue roughly in line, profits slightly above expectations, which is Goldman's qualitative assessment for this quarter. Goldman Sachs maintains a “Buy” rating on Apple, raising the 12-month target price from $360 to $390.

Goldman Sachs’ Business Forecasts

First, iPhone revenue is expected to reach $56.561 billion, up 15% YoY, matching consensus and management’s “mid-teens” guidance, mainly due to “lower volumes, higher prices” — shipments are down 4% YoY (in line with IDC’s estimate), while average selling price is up 20% YoY. Second, Services revenue is expected to increase 10% YoY, in line with consensus and company guidance; Apple previously guided for Q4 Services growth of 9.5%, equivalent to a +12% base in the June quarter minus a 2.5 percentage point sequential FX headwind. Third, gross margin is expected at 47.8%, above the 47.5% consensus, and near the midpoint of the company’s 47%–48% guidance range (excluding tariff refunds: 46%–47%); operating expenses are estimated at $19.375 billion, within the $19.1–19.4 billion guidance range.

It should be noted that Goldman is more conservative on the next quarter: F1Q27 estimated EPS is $2.88, revenue $151.2 billion, and gross margin 46.8%, all below consensus; the company is expected to guide for revenue growth in the low to mid single digits YoY, while Goldman itself estimates +5%.

iPhone: Price Hikes Fill the Gap, But Only Half a Quarter Captured This Time

iPhone shipments are down 4% YoY, for three reasons: the iPhone 18 launch cycle was split — base models were absent, resulting in smaller Q4 channel stocking versus last year’s full iPhone 17 lineup; industry-wide component and memory constraints; and overall price increases suppressing end demand. This was partially offset by continued demand for iPhone 17 and a strong iPhone 18 Pro series debut (especially in China and India).

Compared to the industry, Apple’s resilience stands out: Counterpoint estimates global smartphone shipments dropped 20% YoY in 3Q26, with IDC estimating -22%; meanwhile, IDC estimates Apple’s shipments dropped only 4% to 57.3 million units, with market share rising from 18.2% last year to 22.4%.

Average selling price rose around 20% YoY, for three reasons: demand concentrated on the iPhone 18 Pro and Pro Max (no base models), both the 18 Pro and Pro Max were $100 more expensive, and all US on-sale models (iPhone 16, 17e, 17, and iPhone Air) increased $100. Goldman, however, highlights a timing gap — Apple in F4Q26 realized only part of the quarterly price hike benefit while already incurring higher memory costs, creating short-term gross margin pressure. The full-quarter price hike benefit appears in the December quarter.

Lead Times: Pro Slightly Soft, Pro Max Holds Strong, Duo’s First Week Wait Around 100 Days

Goldman’s proprietary Apple lead time tracker shows rather cool numbers: during the first 42 days post-order opening, the global average lead time for iPhone 18 Pro series was 24 days, below last year’s 25 days for iPhone 17 Pro; and lead time fell faster — 18 Pro dropped from 22 to 13 days about 20 days in, Pro Max from 30 to 24 days about 27 days in, while iPhone 17 Pro Max took about 39 days at the same point. Little variance by color.

Regionally, lead times in the US, UK, India, and Japan were slightly lower than the previous Pro generation, with Hong Kong as the exception: average lead time rose from 18 to 25 days versus last year. Goldman attributes this to price differences: iPhone 18 Pro 256GB is about 10% cheaper in Hong Kong, and the Pro Max 2TB price gap widens to 12.5%, possibly attracting some demand from mainland China. Conversely, lead times in mainland China shortened, likely as some demand waited for the iPhone Duo (foldable), given Chinese consumers are more familiar with foldables.

Early demand indicators are not weak: 1) 18 Pro Max lead times are better than the Pro series average, roughly in line with 17 Pro Max and higher than 16 Pro Max; 2) According to Counterpoint, first-week 18 Pro series sales in China grew 12% YoY, accounting for 33% of the quarter’s smartphone sales, with India’s first-day sales preliminary up +15% to +28% YoY; 3) Supply chain sources report Apple raising 18 Pro Max orders by 10%–15% and Duo orders by 30%, while trimming 18 Pro orders by 10%–15%, keeping the Pro series order total unchanged — total volume stable, but mix shifting toward higher-priced models. On Duo’s pre-order opening day, global average lead time was around 100 days, consistent across regions.

Goldman also clarifies that lead times do not fully reflect demand — they are also significantly affected by channel inventory and supply capabilities, with supply still constrained. Management expects F4Q26 supply constraints to intensify sequentially, affecting iPhone, Mac, and iPad, mainly due to Apple’s in-house SoC using advanced node capacity; third-party supply chain sources say DRAM supply may delay A20 Pro-based assembly, and iPhone Duo’s mass production yield remains below mature levels.

On affordability, US carrier promotions are still a key support: According to CIRP, for the year ending July 2026, carrier channels accounted for about 75% of US iPhone sales; AT&T and T-Mobile offer up to $1,199 in trade-in credits, covering the full starting price of 18 Pro for eligible users, and reducing the incremental cost of 18 Pro Max to about $99. Furthermore, Apple’s July partnership with Klarna for the Apple Upgrade Program allows iPhone payments to be spread over 12 or 24 months.

Mac and iPad: Double-Digit Shipment Declines Offset by June Price Increases

Mac is where Goldman’s forecast diverges most from consensus: Goldman estimates F4Q26 Mac revenue at $8.683 billion, flat YoY, while the FactSet consensus is +12%. Goldman assumes shipments drop 12% YoY (IDC: -11%), offset by a 13% increase in average selling price. Weak shipments stem from three factors: PC market softness after significant front-loaded demand and inventory in 1H26, industry-wide price hikes suppressing end demand, and supply constraints.

The price support is very specific: In June 2026, Apple raised Mac lineup average prices by about 18% — MacBook Neo from $599 to $699 (+17%), 13-inch MacBook Air from $1,099 to $1,299 (+18%), M5 MacBook Pro from $1,699 to $1,999 (+18%), and M3 Ultra Mac Studio from $3,999 to $5,299 (+33%). Entering FY2027, Goldman forecasts Mac revenue growth to accelerate to +15% (FY2026: +6%), driven by low base, full-year effect from price hikes, new products like M6 MacBook Pro/M6 MacBook Air/second-gen MacBook Neo, and especially gaining share in the sub-$800 PC segment.

iPad is the opposite: Goldman estimates F4Q26 revenue at $7.398 billion, up 6% YoY, above the +1% consensus: shipments fall 9% YoY, but average price jumps 17%, driven by a June average price hike of over 20% (table average +23%) for the entire iPad line — entry-level iPad from $349 to $449 (+29%), 11-inch iPad Air from $599 to $749 (+25%). FY2027 iPad revenue is expected to grow +8%.

On the product pipeline, following the October 13 “Welcome Home” event, Goldman updated its tracker: HomeView (7-inch smart home hub, $299, preorders from October 13, ships November 13), new-generation Apple TV 4K, HomePod mini 2, and the Home Collection of smart home accessories (security cameras, video doorbells, smart locks, thermostats) developed with LG Electronics and Schneider Electric, to launch December 2026 and early 2027. The remainder of 2026 is expected to see the 8th-gen iPad mini, M6 MacBook Pro, and a refreshed iMac.

Services: Up 10% YoY, But the Engine Has Shifted Gears

Goldman estimates F4Q26 Services revenue at about $31.521 billion, up 10% YoY. Structurally, the growth engine has clearly shifted: App Store around $7.48 billion, up only 2% (about 24% of Services), TAC (Google search traffic acquisition cost revenue share) around $7.2 billion, up 11% (23%), iCloud+ up 12%, AppleCare+ up 19%, and subscription services up 22%.

App Store is the section to watch this quarter. Goldman estimates growth will fall further from +3% in F3Q26 to +2%. Sensor Tower data shows C3Q26 App Store spending up 2% YoY (vs. 3% in C2Q26), July +1%, August flat, September up to +5%; by region, the US (about 33%) declined 7% YoY (C2Q26: -6%), China (about 20%) slowed to +8% (+10% prior), Japan (about 10%) marginally improved to -2%. Beyond weak base demand, Goldman sees three other pressures: more US off-store payment options, commission structure changes in China/Japan/Brazil (previously estimated to be a 5ppt headwind), and macro volatility. By category, games (about 40%) and entertainment (about 15%) slowed, photo & video (about 9%) improved.

Longer term, Goldman expects Apple’s Services revenue to maintain roughly 9% CAGR from 2026–2030, reaching $173 billion by F30; within that, advertising and other will grow at +14% CAGR to $69 billion, becoming the No. 1 incremental source, iCloud+ to $19 billion, AppleCare+ to $18 billion, first-party services to $30 billion, while App Store will grow a modest +4% CAGR to $34 billion. Three supporting reasons: resilience of Google TAC payments (Sensor Tower shows iOS Chrome session time and MAU stable), rising iCloud+ penetration as data usage and Apple Intelligence features increase, and AppleCare+ growing with device upgrades. Apple’s August price hike for Apple TV should also contribute incremental revenue as churn rates normalize.

Apple TV itself: Goldman estimates F4Q26 revenue at about $2.3 billion, up 33% YoY, net new paid subscriptions up 1 million; in C3Q26, about 86 original episodes aired, with content amortization of about $756 million, and C4Q26 expected at about $610 million.

FY2027 Pivot Points: Spring Launches, Duo Upgrades, Low Base Effects

Goldman expects FY2027 iPhone revenue growth of +7%, supported by five factors: spring 2027 launch of the base iPhone 18, iPhone 18e, and iPhone Air 2; upgrade cycle catalyzed by the new iPhone Duo form; low base after F2H26 supply constraints; full-year price hike benefit; and affordability support from high-end positioning, carrier subsidies, and Apple Upgrade. Goldman believes, with ongoing memory price pressure on mid/low-end phones, Apple’s high-end focus is relatively advantageous — IDC forecasts the overall smartphone market will remain constrained by 2027.

Valuation is the core of this upgrade. Target price raised from $360 to $390, P/E multiple up from 37x to 40x Goldman’s “NTM+1Y” EPS. The higher multiple is attributed directly to stronger confidence in the iPhone upgrade cycle post-Duo launch — not due to raised earnings estimates (FY2026/27/28 EPS are largely unchanged at $8.89/9.16/9.76, P/E 39.1/38.0/35.6x).

In terms of investment thesis, Goldman’s logic is: the market’s focus on hardware revenue slowdown obscures the resilience and visibility of the Apple ecosystem and services revenue; installed base growth, structural services growth, and product innovation should offset cyclical headwinds like longer upgrade cycles and weakness in PC/tablet demand; over the next five years, most gross profit growth will come from services, marking a turning point for the “Apple-as-a-Service” narrative.

There are five key risks: weakened consumer demand (iPhone accounts for about 50% of FY2025 revenue, highly dependent on upgrades), supply chain disruptions (final assembly remains mainly in China and key parts are sourced from few suppliers), intensifying competition (Apple is not top in every segment — e.g., video streaming content spend trails some rivals), regulatory risk (major markets face intense scrutiny, with possible requirements to open up proprietary products or services), and capital allocation execution (returns from M&A and buybacks are uncertain and could face stricter oversight). Additionally, Goldman notes Apple returned more than $110 billion to shareholders in FY2025 and this is expected to grow with free cash flow. The company guides for a sequential FX headwind of about 2.5ppt in F4Q26 (implying -1.5%), below that implied by Goldman’s spot FX model.