NEW YORK, July 15, 2026, 11:10 a.m. EDT — Apple Inc. (NASDAQ: AAPL) secured regulatory clearance from China for its Apple Intelligence product on Wednesday, a pivotal step that shifts investor focus to the sustainability of the company's recent resurgence in the world's largest smartphone market. The rally, which began even before the AI service's approval, has been bolstered by early data showing a sharp uptick in iPhone shipments.
According to preliminary estimates from IDC, Apple shipped approximately 11.9 million iPhones in mainland China during the June quarter, a 24.4% year-over-year increase from 9.6 million units in the same period last year. This growth stands in stark contrast to the overall Chinese smartphone market, which contracted by 4.3% during the same timeframe. Apple's market share in China rose to 18.1% from 13.9% a year earlier, while rival Huawei saw its share increase to 22.6% from 18.1%, with shipments growing 19.4%. Xiaomi, however, experienced a 21.7% decline in shipments, its share falling to 12.4% from 15.1%.
Following the news, Apple's stock surged 2.9% to $324.03 in late morning trading, after hitting a new intraday high of $325.65. The gain added approximately $135 billion to the company's market capitalization, bringing it to $4.77 trillion. The stock now trades at 39.2 times trailing earnings, reflecting high investor expectations for continued growth driven by AI integration and potential price increases.
China's cyberspace regulator announced that Apple Intelligence was among seven phone-based generative AI services that completed registration, a prerequisite for public launch. The notice did not specify a release date for the service. Alibaba Group (NYSE: BABA) confirmed that its Qwen AI model will be integrated with Apple's iPhone, iPad, Mac, and Vision Pro devices in China, while Baidu (NASDAQ: BIDU) also said it is collaborating with Apple to bring AI features to Chinese iPhone users. On-device AI processing, which keeps some computations on the phone itself, is expected to be a key component of the offering.
Market Context and Analyst Views
Apple's Greater China business had already shown signs of recovery before the AI approval. Net sales in the region climbed 28% to $20.5 billion in the March quarter, representing 18.4% of total revenue, with iPhone credited for most of the gain. However, the shipment and revenue numbers track different periods and geographies, and both suggest the rebound predates any local AI launch.
Wall Street remains divided on Apple's ability to sustain its momentum amid higher prices. KeyBanc Capital Markets analyst Brandon Nispel downgraded Apple to Underweight with a $250 price target, citing slower device upgrades and expecting Services revenue growth of just 7% in fiscal 2027, well below the market's nearly 12% estimate. In contrast, Morgan Stanley (NYSE: MS) analyst Erik Woodring maintained an Overweight rating and a $360 target, arguing that product price hikes could add 2% to 4% to fiscal Q3 earnings per share and about 1% to fiscal 2027 EPS.
Investors see a straightforward narrative: Chinese approval strengthens the bull case, but it does not guarantee immediate revenue. Apple must leverage this opportunity to drive upgrades, retain customers, or boost Services income. With the stock trading at a high multiple, there is little margin for error if the rollout falters or replacement rates fail to materialize.
Outlook and Upcoming Catalysts
Clearance does not equate to a launch. Apple still needs to rely on local AI models, and regulators have not provided a timeline. IDC warns that China's market could drop by as much as 20% in the second half if current trends persist. CEO Tim Cook has noted that "memory costs will drive an increasing impact on our business," suggesting that higher prices could help margins but may also dampen the buying surge that fueled Apple's strong June quarter.
Apple's fiscal Q3 report, scheduled for July 30, is the next major catalyst. Investors will focus on Greater China sales, product margins, and any updates on the AI launch. Another quarter of market share gains following recent price hikes would support Woodring's optimistic view, while weaker results from pulled-forward demand could vindicate Nispel's caution. As Beijing lifts restrictions, the debate over Apple's valuation remains intense.
