Earnings Scoreboard: Apple slumps after Tim Cook's final earnings; Microsoft rallies in big-tech results week
1 min read
The coverage · 2 reports
The story
Big tech earnings week produced a clear divergence: Apple stock slumped after what was reported as Tim Cook's final earnings call as CEO, while Microsoft shares rallied on its own results. Apple's underlying business remains large, with FY2025 revenue of $416.2B (+6.4% YoY), gross margin of 46.9%, net margin of 26.9%, and diluted EPS of $7.46. Microsoft posted FY2026 revenue of $331.8B (+17.8% YoY), with materially higher margins — 67.9% gross and 40.3% net — and diluted EPS of $17.95.
The story matters because it touches sentiment around leadership transition at Apple at the same time the market is rewarding Microsoft's growth and margin profile. Apple's YoY revenue growth of 6.4% trails Microsoft's 17.8%, and Microsoft's margin structure is meaningfully wider, which likely explains part of the divergent stock reaction even though both companies are reporting from different fiscal-year cutoffs.
The second-order setup is a relative-value question: does Apple's slump reflect a temporary leadership-transition discount that fades, or does it reflect a genuine growth-and-margin gap versus Microsoft that persists? Watch for commentary on Apple's succession plan and any forward guidance color, as well as whether Microsoft's rally holds up as the broader big-tech earnings week concludes.
The case — both sides
Apple still generated $416.2B in FY2025 revenue with a 46.9% gross margin and $7.46 diluted EPS, and a sell-off tied to a leadership headline rather than deteriorating fundamentals could prove an overreaction that unwinds once succession clarity emerges.
Microsoft's 17.8% YoY growth versus Apple's 6.4%, alongside a 40.3% net margin versus Apple's 26.9%, shows a widening structural gap that the market may be correctly re-pricing rather than overreacting to.
The house read
Two-sidedAAPL slumped and MSFT rallied in the same earnings week — the question is whether this is a leadership-transition-driven Apple discount or a durable growth/margin gap versus Microsoft.
Wrong ifIf Apple's slump is purely a short-lived reaction to the CEO transition headline rather than a business fundamentals issue, the stock could recover quickly and erase the spread; also both stocks report on different fiscal calendars, complicating direct comparison.
Published read · research, not advice