Apple Inc. (AAPL) reported a record revenue of $30.98 billion from its Services segment in Q2 of fiscal 2026, a year-over-year increase of 16.3%, contributing 27.9% to total net sales. The growth is driven by a growing ecosystem of over 2.5 billion active devices and strong user engagement on platforms like Apple TV+, along with an expansion in advertising services, which saw significant growth compared to the previous year.
Despite this success, Apple faces stiff competition from Amazon (AMZN) and Microsoft (MSFT) in the streaming and gaming sectors. For example, Amazon’s advertising services revenue rose by 24% year-over-year to $17.2 billion, while its Prime Video service boasts a larger content portfolio than Apple TV+. Apple shares have returned 13.6% year-to-date, underperforming the Zacks Computer and Technology sector’s 17.5% return.
For fiscal 2026, the Zacks Consensus Estimate for Apple’s earnings is $8.74 per share, indicating a projected 17.2% year-over-year growth. Apple’s stock currently trades at a forward price-to-earnings ratio of 33.33, significantly higher than the sector’s average of 25.64.
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