Apple delivered a clean beat-and-raise in Q2 FY26 with revenue of $99.2B (+4% YoY) topping consensus by $1.4B and GAAP diluted EPS of $1.78 beating by $0.06, driven by Services strength (+13% YoY to a record $27.8B) and a 40 bp gross margin expansion to 47.0%. iPhone revenue of $52.5B (+5% YoY) outperformed as Apple Intelligence-eligible devices extended the upgrade cycle for a third consecutive quarter, while Greater China returned to growth (+5% YoY) for the second straight quarter following the February 2026 Apple Intelligence rollout via Baidu. Capital return totaled $31.5B in the quarter and the Board authorized an incremental $110B buyback while raising the dividend 4% to $0.27. We maintain BUY and raise our price target to $245 (from $230) on stronger Services trajectory, China stabilization, and Apple Intelligence monetization optionality.
