Apple Inc. reported stronger-than-expected earnings for its fiscal Q2 2025, posting 5% year-over-year growth in both revenue and net profit. However, Greater China revenue fell slightly by 2%, marking the only regional decline. During the earnings call, CEO Tim Cook also announced that Apple plans to source over 19 billion U.S.-made chips this year, underlining its deepening investment in American manufacturing.

For the quarter ending March 29, Apple reported $95.36 billion in revenue, up from $90.75 billion a year earlier, beating analysts' average estimate of $94.75 billion. Net profit rose to $24.78 billion, exceeding expectations of $24.26 billion. Diluted earnings per share stood at $1.65, up 8% year-over-year.

Product and Service Lines Show Broad Growth

iPhone revenue came in at $46.84 billion, a 1.9% increase from the previous year. Mac sales rose 7% to $7.95 billion, while iPad revenue jumped 15% to $6.40 billion. Services, including iCloud, Apple Music, and Apple TV+, surged 12% to $26.65 billion. Only the wearables and accessories category declined, falling 5% to $7.52 billion.

China Sales Dip Slightly, But Cook Remains Optimistic

Greater China revenue slipped to $16.00 billion, down 2.26% from the year before, but still slightly above analyst forecasts. Cook attributed the decline primarily to foreign exchange effects, noting that sales were essentially flat on a constant currency basis. He also pointed out sequential improvement from the previous quarter, when sales fell by around 11% year-over-year.

China's consumer subsidy program had a "positive impact" on sales, though Cook acknowledged the difficulty of quantifying it. iPhones priced above RMB 6,000 don't qualify, but other Apple products like iPads and MacBooks do. Cook emphasized Apple's strong brand appeal in China, with iPhone and iPad still ranking among the top two best-selling models in their categories.

Tariff Risks and Production Shift to India, Vietnam

Apple faces mounting challenges from rising U.S. tariffs on Chinese imports. Cook said the company expects a $900 million cost hit in Q3 if current global trade policies remain unchanged. He confirmed that most iPhones sold in the U.S. in the next quarter will be made in India, while nearly all iPads, Macs, Apple Watches, and AirPods sold domestically will be produced in Vietnam.

Despite shifting some production, Apple still relies heavily on Chinese facilities for global markets. Cook denied rumors of a demand surge caused by tariff fears but acknowledged that Apple built up some inventory in anticipation.

Apple to Source 19 Billion U.S.-Made Chips in 2025

As part of its push to support American manufacturing, Apple plans to source over 19 billion chips from the U.S. this year, including tens of millions from TSMC's Arizona fabs. "We expect to source more than 19 billion chips from a dozen states, including advanced chips from Arizona," Cook stated. These include components from GlobalFoundries, Texas Instruments, Micron, Skyworks, Qorvo, and chips made at TSMC's Arizona facility for devices like iPads and Apple Watches.

Though Apple's flagship SoCs will continue to be produced in Taiwan, many of the less advanced chips — such as display drivers, power management ICs, and connectivity modules — are made domestically in the U.S.

$500 Billion U.S. Investment Plan

Apple also reaffirmed its $500 billion investment commitment in the U.S. over the next four years, covering capital and operating expenditures across multiple states. The initiative includes a new facility in Texas dedicated to AI server production. Apple's suppliers, including Foxconn in Houston and Wistron in Dallas, are also ramping up AI server manufacturing capacity over the next 12–15 months.

The company's long-term strategy appears to center on diversifying its supply chain while solidifying its presence in key global markets.