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Apple (NASDAQ:AAPL) just stepped into the earnings arenaand let's just say, it's not walking on solid ground. On the surface, things look calm: Q1 revenue is expected to hit $94.4 billion, with $1.62 EPS. Stronger service revenues and resilient U.S. sales are holding the line. But behind the numbers, Apple is navigating a geopolitical minefield. Tariff whiplash from Trump's new trade push briefly threatened a 145% levy on Chinese smartphone importsbefore getting scaled back to 20%. That slashed Apple's projected tariff pain from 29% to just 5%, according to UBS. A temporary win, but not without scars. Meanwhile, Greater China iPhone sales are flat, and analysts don't see this quarter as a turning point. As Morgan Stanley put it, don't expect a key catalyst.
Now here's where things get messier. Apple's long-running App Store feud with Epic Games just escalatedfast. A federal judge ruled the tech giant knowingly defied a court order to allow third-party payments, accused it of lying in court, and referred Apple execs to prosecutors for criminal contempt. That's not just a PR hitit's regulatory fire aimed straight at Apple's most profitable walled garden. The ruling bars Apple from its usual commission workarounds and demands immediate compliance.
Put simply: Apple's core engine is still humming, but it's now running through sandstorms of legal risk and policy turbulence. For investors, this quarter won't tell the whole storyit's just the first chapter in Apple's biggest realignment yet.
This article first appeared on GuruFocus.