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Shares of Apple (AAPL +2%) remain crisp today, spiking to fresh all-time highs after Bloomberg reported the iPhone maker reached sales of $8.0 bln in India. Apple also received an upgrade to "Buy" from "Hold" at Loop Capital, citing a significant opportunity to solidify itself as the leader in Gen AI-focused consumer tech. A third piece of news may also be lifting Apple today after the International Data Corporation's preliminary data showed that the global smartphone market grew by 6.5% yr/yr in Q2, the fourth straight quarter of shipment growth, underpinning a continued recovery in demand.

Apple has sprinted around +40% higher since Q2 (Mar) results, as investors signal their excitement over the possible sales boost incorporating AI into the iPhone and iPad may bring. Even though the company's newest operating system has yet to be released, the market is betting that it spurs a resurgence in demand after a few periods of underwhelming yr/yr growth. This may not manifest in Q3 (Jun) numbers, which are set to be released on August 1. Instead, with the retail release of iOS 18 launching later this year, possibly in the fall, any impact of Apple's newest AI-centered operating system may not appear until Q4 (Sep) or even 1Q25 (Dec) figures.

• However, in the interim, reports of outsized growth across other key initiatives can keep the underlying optimism alive. By registering a reported +33% jump in revenue across India over the trailing twelve months through March, investors have a clearer understanding of just how well Apple is performing in one of its best markets.
• During its past few quarters, India has been a highlight, boasting double-digit growth in Q1 and Q2, reaching record quarterly sales each time. CEO Tim Cook remarked that India was an exciting market and a major focus in May. Emerging markets as a whole have been providing a boost to Apple's quarterly revs, with several regions across Latin America and the Middle East enjoying solid demand dynamics.
• Apple is not just interested in selling its products in India but also in producing them there as a way to diversify its supply chain after the pandemic caused significant disruptions in China. Mr. Cook also mentioned that production in India is critical to becoming competitive in the region.
• Unlike in China, Apple's smartphone market share in India is tiny as less expensive Android (GOOG) OEMs dominate the consumer market, from Samsung (SSNLF) to Xiaomi. However, in China, Apple started at the bottom, only to slowly chip away at leaders' market share before it became one of the dominant forces in the region. With demographics similar to China's, India offers a market from which Apple can extract considerable revenue.

As Apple continues to carve out fresh all-time highs, it heads into its Q3 results facing lofty expectations. However, suppose emerging markets like India sustain their past growth characteristic while developed nations, like the U.S., enjoy a broader recovery. In that case, particularly as the thrill of AI mounts, Apple will be in good shape to maintain its upward momentum.