The iPhone maker’s latest financial earnings revealed its payments for acquisitions of property, plant, and equipment jumped to $6.01 billion in the first six months of FY25, up from $4.39 billion in the same period of FY24, a ~37% YoY.
Apple is looking to expand production in the US in a bid to beat potential tariffs and rising costs, with plans to build new server manufacturing plants and engineering sites.
“We recently announced plans to spend $500 billion over the next four years, expanding our teams and our facilities in several states... and opening a new factory for advanced server manufacturing in Texas,” said Apple CEO Tim Cook during the earnings call.
The cash will also help fuel Apple’s semiconductor ambitions, with Cook confirming the company plans to source more than 19 billion chips during calendar year 2025, including “tens of millions of advanced chips being made in Arizona this year”.
Despite the shift towards US production, Cook told investors the firm saw “a limited impact from tariffs” in the March quarter, though he acknowledged uncertainty about future exposure.
“Assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs,” Cook said.
“For our part, we will manage the company the way we always have, with thoughtful and deliberate decisions, with a focus on investing for the long term, and with dedication to innovation and the possibilities it creates.”
Dipanjan Chatterjee, VP and principal analyst at Forrester said the tariff situation was one of the most important issues for Apple to address this quarter.
"While the company will employ short-term tactics to mitigate tariff risk, such as seeking waivers and stockpiling inventory ahead of more onerous tariffs, our prediction is that Apple will employ a wait-and-see approach, given the unpredictability of the administration’s trade policies and the remote likelihood of ever cost-efficiently producing iPhones in the US,” Chatterjee said.
While Apple’s capital investment strategy dominated the call, the company still delivered a solid financial performance in its fiscal second quarter, beating analyst expectations.
Revenue came in at $95.4 billion, a 5% year-on-year increase, while net income rose to $24.78 billion.
Diluted earnings per share hit $1.65, an 8% YoY rise and a March quarter record. Gross margin stood at 47.1%, comfortably within the company’s guidance range.
Much of Apple’s growth was driven by the Services segment, which posted an all-time high of $26.65 billion, up 12% from the previous year.
The division, which includes Apple TV+, Apple Pay, iCloud, and the under-fire App Store, now boasts over one billion paid subscriptions across its platform.
Apple’s hardware performance was more mixed. iPhone revenue grew modestly to $46.84 billion, up 2% year-on-year, aided by the launch of the iPhone 16e and solid uptake of its premium 16 Pro models.
Meanwhile, Mac revenue climbed 7% to $7.95 billion, and iPad sales surged 15% to $6.4 billion, reflecting strong demand for new M3-powered devices.
However, Apple’s Wearables, Home and Accessories segment saw a 5% decline to $7.52 billion, due in part to a tough comparison with the prior year’s Apple Vision Pro and Watch Ultra launches.
Looking ahead, the company expects low to mid-single-digit revenue growth for the June quarter and has warned of a potential $900 million hit from tariffs, depending on how geopolitical and trade dynamics evolve.
RELATED STORIES
DMA fines on Meta and Apple spark transatlantic tech tensions: Regulation or retaliation?
Apple, Google face CMA probe into UK mobile market grip
Apple, Alibaba Cloud join board of group developing GPU interconnect standards
