Apple’s biggest overhang over the past two years just turned into one of its strongest earnings positives.
In fiscal second-quarter results released on Thursday, the company said Greater China revenue rose to $20.497 billion, up 28% from a year earlier and comfortably ahead of Wall Street expectations of around $19–19.5 billion.
That made China one of the clearest beats in a quarter that was already strong across the board, with Apple posting record March-quarter revenue of $111.2 billion and earnings per share of $2.01.
Apple stock: From key risk to key support
The contrast with a year ago is sharp.
In Apple’s fiscal second quarter of 2025, Greater China revenue was $16.002 billion, and the region had been a major source of investor concern.
This time, China not only rebounded, but it also stood out as one of the strongest contributors to the overall beat.
Tim Cook said Apple delivered “double-digit growth across every geographic segment” and described the quarter as the company’s “best March quarter ever.”
That matters because China has been central to the bear case for Apple for much of the past two years.
Slower demand, intensifying local competition and persistent concerns about share loss to domestic brands such as Huawei had weighed on sentiment.
Instead, Apple said its installed base of active devices reached a new all-time high, while services revenue also set a record.
In simple terms, China shifted from being a potential drag to a meaningful positive in the quarter.
Signals were there before earnings
This rebound did not come entirely out of nowhere. In late January, Apple’s Greater China revenue jumped 38% to $25.53 billion in the holiday quarter, marking its strongest growth in the region in years.
Then, in March, data showed Apple’s smartphone sales in China rose 23% in the first nine weeks of 2026, even as the broader Chinese handset market declined about 4%.
By April, Counterpoint Research data indicated iPhone shipments in China were up roughly 20% in the first quarter, the fastest growth among major vendors.
The drivers point to a mix of cyclical and policy support rather than a purely one-off surge.
Apple appears to have benefited from e-commerce discounting and eligibility for state-backed subsidies on certain iPhone models.
Tim Cook also told analysts that Greater China revenue rose 33% in the first half of the fiscal year, with March-quarter growth at 28% and retail traffic increasing by double digits.
What this means for AAPL now
The bigger implication is for valuation, as China was the key variable analysts were watching heading into the report.
Now the question is whether the rebound marks a short-term boost or the early stages of a more durable recovery.
Earlier in the year, analysts had described the 38% holiday-quarter growth as unusually strong, while still flagging longer-term competitive pressures.
That tension remains, but the latest data gives Apple a stronger footing in that debate.
The slowdown from 38% growth in the holiday quarter to 28% in the March quarter is also worth noting.
This is not a case of China suddenly becoming an easy growth market again.
Instead, it suggests the region may no longer be a consistent drag, which is enough to shift the narrative and reopen the upside case for the stock.
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