Apple has announced its financial results for the fiscal third quarter, showcasing a 5% increase in revenue, surpassing market expectations. The tech giant reported a total revenue of $85.8 billion, with quarterly earnings per diluted share rising by 11% to $1.40.

Despite the positive results, Apple shares remained stable in extended trading. However, modest growth is anticipated for the upcoming quarter. The iPhone continues to be Apple's most significant product line, accounting for 46% of the quarter's sales. iPhone sales reached $39.30 billion, a slight decline of 0.9%, but still better than the 2.2% drop predicted by analysts.

The demand for iPhones is bolstered by the upcoming AI features announced at the Worldwide Developers Conference in June. These new features will be exclusive to the iPhone 15 and newer models, generating consumer interest and potential sales.

Apple Services Achieves $24.21 Billion in Sales

Apple's CEO, Tim Cook, highlighted the company's increased investment in AI, stating, "We've redeployed many people to work on AI, which is reflected in our year-over-year increase in AI spending." He also noted that around half of iPad buyers are first-time customers, indicating that the tablet market is not yet saturated.

In the wearables segment, which includes Apple Watches and AirPods, sales decreased by 2.3% to $8.10 billion, still surpassing analyst expectations of $7.79 billion.

Apple's Services division, encompassing Google revenue, cloud storage subscriptions, and offerings like Apple TV, reported $24.21 billion in sales, a 14% increase that aligns with both company and market expectations.

Additionally, Apple disclosed that it spent $32 billion on dividends and share repurchases during the third quarter.