With the Nasdaq closing at its lowest level in 7 months yesterday, the Apple share price has also found itself on the end of the recent weakness in tech shares, down over 12% from its record highs in early January.

At its last set of numbers in Q4, revenues fell short of expectations, coming in at $83.36bn which while still a solid number invited questions as to how much the recent disruptions to supply chains had affected its ability to produce enough products to satisfy demand.

CEO Tim Cook admitted as much back in October when he said that the various supply problems cost Apple $6bn over the quarter, while in Q3 they cut iPhone production by 10m units.

In Q4 Apple said its biggest problem was fulfilling the demand for its products so there was some concern that last night’s Q1 numbers might suffer from the same problems, given the revenue miss on iPhone sales that we saw in Q4.

That being said Q1 tends to be Apple’s best quarter in the leadup to Christmas, and it should also be remembered that the slowdown in Q4 could merely have been a symptom of customers holding back to take advantage of the raft of new product upgrades that came in Q4 with the newest iPhones, iPads, Watches and Macs not shipping until the end of November, beginning of December.

Whatever concerns investors might have had leading into last night’s numbers, they needn’t have worried, as the demand that seemed so weak in Q4, came surging back in the leadup to Thanksgiving and the Christmas holiday period.

Apple’s Q1 revenue came in at a new record of $123.95bn, well above expectations of $119bn, while profits came in at $2.10c a share, or just under $35bn, with record revenue for iPhone sales, helping to push the shares sharply higher in after-hours trade, and push the shares back towards this month’s record highs.

The numbers were made up as follows, iPhone revenue came in at $71.63bn, above forecasts of $67.74bn, Mac revenue, $10.85bn, Wearables, Home and Accessories, $14.7bn, iPad revenue $7.25bn, Services revenue of $19.25bn, with only iPad revenue falling shy of consensus expectations, of $8.1bn, which was a little disappointing given the launch and updates of the mini and iPad range.

Apple CFO Luca Maestri put the iPad miss down to difficulties in sourcing enough components, as well as allocating components away to the more expensive iPhone, which suggests that demand wasn’t the problem here and that Apple put its priority on its higher-margin products like the iPhone.

Operating margins on products came in at 38.4%, although services margins rose to a new record of 72.4%.

Services revenue continues to go from strength to strength and with 785m subscribers to music streaming and gaming, Apple CEO Tim Cook suggested that they starting to look at developing products for augmented reality, and were developing plans for an AR headset and glasses in the next year or so, as it looks to move into the Metaverse.

Last night’s numbers were even more impressive given that there were some product delays during December, with all geographies, with the exception of Japan which fell short.

Some of these supply disruptions could well bleed through into Q2, however, this isn’t expected to adversely impact its ability to shift its products, with strong demand still coming through, although Q2 revenues are still expected to slow to around $90bn.

Apple declined to offer any guidance in line with previous quarters since the pandemic began.

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