Apple Inc (NASDAQ:AAPL) stock is falling Friday after the company’s third-quarter financial results were reported Thursday after market close. Investor Gene Munster says the drop is an overreaction to a report and guidance that wasn’t as bad as it looked.
Gene Munster on Q3 Earnings, Guidance
Apple reported a double beat in the third quarter and third-quarter records for several items, including iPhone revenue.
The stock is falling Friday on guidance and forward commentary.
"Apple’s September outlook was not as bad as it looked," Munster said in a new blog post.
The managing partner at Deepwater Management said investors will feel better about the guidance in the weeks to come. Munster said the guidance of revenue growth of 9% to 11% could have been higher if not for supply constraints and foreign exchange rates, estimating around 15% growth without these bottlenecks.
"Either way, numbers are going down, and that understandably doesn’t sit well with investors."
On the third-quarter results, Munster said results were slightly above expectations, but some segments saw weakness. The results showed strength for the iPhone and Mac, while other areas like the iPad and Services came in light.
The investor believes that with Apple stock up so much in recent months, investors wanted more of a "blowout quarter." Add that into weaker than expected guidance and Munster believes these are the two main reasons for the selloff.
"While disappointing, I believe it’s not as bad as it looked. In fact, I felt it was a favorable guide if you compare apples to apples."
What’s Next for Apple
Munster is looking ahead to Apple’s potential shift of releasing new phones in two batches, one in the fall and one in the spring. The investor says having three new phones in the fall could be bad for overall unit sales, but would see higher average selling prices as it would be the premium models released first.
A price increase on the iPhone is also expected for Munster, who said this could be why iPhone demand was so high in the third quarter.
"That might have pulled some demand from September into June," Munster said.
Munster believes a foldable iPhone is coming this fall, but likely won’t be a huge unit driver for growth.
The investor sees Apple’s AI opportunity as being in the new Siri AI, which could bring more new users to Apple. Other potentials include wearables and an AI-first device.
Munster highlighted Apple CEO Tim Cook saying there are "enormous opportunities for Apple in AI" on the conference call Thursday.
Apple Stock Price Action
Apple stock is down 9.9% to $300.48 on Friday versus a 52-week trading range of $201.50 to $344.57. Apple stock is up 10.9% year-to-date in 2026.
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