Apple App Store reported global March 2026-quarter revenue growth of about 7% year-over-year, while the U.S. market was broadly flat

Overview

This report focuses on Apple Inc.’s App Store revenue performance in the March 2026 quarter and its implications for services forecasts. UBS says that on a reported basis, global App Store revenue grew about 7% year-over-year, and around 5% on a constant currency basis; U.S. was broadly flat, while ROW was about 11% growth. Although moderate App Store momentum adds some downside risk, UBS kept its March quarter services revenue growth forecast of about 14.4% unchanged and maintained a 12-month Neutral rating and US$280 target price.

Core views

The core view is that App Store performance alone is not enough to change UBS’s March-quarter services forecast for Apple. The main weakness is the flat U.S. App Store growth, but stronger ROW recovery, record-setting growth in advertising, music, payments, and cloud services, and rapid AI app growth together support continued services growth. On valuation, the US$280 target implies about 32x CY27 EPS of US$8.90, which is richer than historical averages, reflecting strong near-term growth, but forecast excess return is -0.3%, so the rating remains Neutral.

Analysis framework

The report analyzes App Store revenue through regional decomposition and year-over-year growth comparison, including the U.S., ROW and total global levels, and compares growth against the 2025-12 quarter while adjusting for quarter-over-quarter base effects. It then combines App Store growth with other service-growth drivers to determine whether March 2026 quarter service revenue guidance should be revised. Valuation is done via a P/E multiple framework: multiplying CY27 EPS estimate of US$8.90 by about 32x to derive the US$280 target.

Methodology notes

• equity_valuationP/E multiple valuation

  市盈率倍数估值

  UBS used an estimated CY27 EPS of US$8.90 at about 32x to derive Apple’s US$280 target price, about three times above the average of the past three years and roughly one standard deviation above both three-year and five-year averages.

• segment_growth_analysisRegional App Store growth decomposition

  App Store区域增长拆分

  The report decomposes App Store revenue into U.S., ROW and global, comparing quarter-over-quarter year-over-year growth, changes in basis points versus the prior quarter, and base effects, to assess service-revenue risk.

• equity_return_frameworkForecast Stock Return and Market Return Assumption

  预测股票回报与市场回报假设

  Forecast stock return is composed of expected price appreciation plus dividend yield. In this report, expected price appreciation is 8.2%, dividend yield is 0.4%, resulting in forecast stock return of 8.6%, below the market return assumption of 8.8%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Apple Inc. (AAPL.O / AAPL US)

  Primary company covered

  Strengths

  Services growth drivers are diversified; global App Store was still up about 7%, AI app growth was strong, and coverage spans hardware, software, services and ecosystem channels.

  Weaknesses

  U.S. App Store growth was essentially flat, and overall App Store growth was muted. The valuation multiple is elevated relative to historical averages.

  Comparison

  UBS expects service revenue growth of about 14.4% in the March quarter, above the consensus estimate of about 13.6%; forecast stock return of 8.6% is slightly below the assumed market return of 8.8%.

  Risks

  Declining iPhone shipments and/or insufficient product innovation, macro weakness with particularly weak demand in China, increased low-end smartphone competition due to reduced product differentiation, regulatory pressure, and platform operating missteps.

Key data

• Report date2026-04-06UBS Global Research
• 12-month ratingNeutraldisclosed on report cover
• Target priceUS$280.0012-month target
• Current priceUS$258.84price on 2026-04-06
• Global App Store growth~7% YoY reported; ~5% FX neutralMarch 2026 quarter
• U.S. App Store growthflatabout 320 bps slower than 2025-12 quarter
• ROW App Store growth~11% YoY reportedabout 320 bps faster than 2025-12 quarter
• Services revenue forecast~14.4%UBS estimate for March 2026 quarter; consensus estimate around 13.6%
• AI apps share of App Store mix~5%March 2026
• AI app growth~144% YoYMarch 2026
• CY27 EPS estimateUS$8.90valuation basis for target price
• Forecast stock return8.6%8.2% expected price appreciation plus 0.4% expected dividend yield

Impact & implications

For investment judgment, the implication is that slower App Store growth, especially a flat U.S. market, could dampen expectations for accelerating services growth; however, the services segment is not solely dependent on the App Store, as advertising, music, payments, cloud services and AI apps continue to provide growth support. Therefore, the report leans toward confirming the resilience of service revenue rather than upgrading the rating. Valuation already reflects relatively strong near-term growth, while implied upside is limited, supporting Neutral rather than a more constructive rating.

Risks

• Product delays or insufficient innovation, especially weakening iPhone shipments.
• Macroeconomic weakness suppressing product demand, especially in China.
• Erosion of product differentiation, increasing pressure from low-end smartphone competition.
• Heightened government regulation limiting Apple’s platform influence.
• Platform management missteps.
• Moderate App Store growth may create downside risk for service revenue estimates.

What to watch

• Whether Apple service revenue reaches UBS’s roughly 14.4% growth estimate in the March 2026 quarter.
• Whether U.S. App Store growth recovers from being broadly flat.
• Whether ROW App Store growth of about 11% is sustainable.
• Whether AI apps continue to rise in share of the App Store mix and maintain accelerating year-over-year growth.
• Progress on Apple onboarding AI models beyond OpenAI and their incremental impact on the App Store.
• Whether advertising, music, payment services and cloud services continue to set revenue records.