Apple shares slid after its quarterly report showed sales declining for the fourth straight quarter, although revenue beat Wall Street’s expectations.

The Cupertino, California-based tech giant brought in $89.5 billion in its fourth quarter of 2023, down 1% from a year ago but slightly higher than analysts’ forecasts. Apple’s stock is up nearly 42% year to date and was trading at $177.57 a share at Thursday’s close, although the stock shed about 3% in after-hours trading after a weaker-than-expected holiday forecast was issued. 

Sales of iPhones beat analysts’ estimates, coming in at just over $43.8 billion versus an estimate of $42.6 billion – but sales of Mac and iPad both came in below estimates as Mac sales were $7.6 billion when $11.5 billion was expected, and iPad sales were $6.4 billion when $7.1 billion was forecasted. The drop in Mac and iPad sales was partially offset by a $1 billion increase in services revenue.

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Chief Financial Officer Luca Maestri said sales in the current quarter – which is typically when it has its biggest sales of new iPhone models – will be similar to the previous year due to supply constraints affecting the new high-end iPhone 15 Pro and Pro Max.

Apple CEO Tim Cook shed some light on how the tech giant is approaching artificial intelligence (AI) in its products in response to an analyst’s question on the company’s earnings call.

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"We view AI and machine learning as fundamental technologies and they’re integral to virtually every product that we ship, and so just recently when we shipped iOS 17 it had features like personal voice and live voicemail – AI is at the heart of these features," Cook said. 

"And then you can go all the way to the life-saving features on the watch and the phone like fall detection, crash detection, ECG on the watch – these would not be possible without AI," he added. "So we don’t label them as such if you will, we label them as what their consumer benefit is. But the fundamental technology behind it is AI and machine learning."

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He also indicated the company is making significant investments in generative AI but opted against offering a preview of how that could be integrated into Apple’s products.

"In terms of generative AI… obviously we have work going on and I’m not going to get into details about what it is because as you know we really don’t do that. But you can bet that we’re investing, we’re investing quite a bit, we are going to do it responsibly and you will see product advancements over time where those technologies are at the heart of it," Cook explained.

Reuters contributed to this report.