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iPhone and Mac growth exceeded expectations, and profit margins also reached a rare high. The sell-off after the earnings report indicates that investors have shifted their focus from how much Apple just earned to whether this growth can continue at the same pace and profit margin into the next quarter. Apple delivered a report on Thursday that most companies would celebrate. For the fiscal third quarter ending June 27, Apple’s revenue reached $109.4 billion, a year-over-year increase of 16%; diluted earnings per share were $2.02, up 29% year-over-year. iPhone, Mac, and services revenue all set records for the June quarter, and the active device installation base also hit a new high. Apple called it the strongest June quarter in the company’s history. However, the immediate market reaction was to sell, with the stock price noticeably falling in after-hours trading. Chart | After the earnings release, Apple’s stock price fell significantly in after-hours trading, with market focus shifting to the quality of growth in the next quarter. Two seemingly conflicting things are true at the same time: Apple’s operating performance this quarter was strong, but investor confidence in the next quarter declined. The key to this divergence lies in five questions. 1. How strong is this earnings report exactly? First, look at the part that is easiest to overlook: Apple’s growth comes from multiple product lines. iPhone revenue reached $54.25 billion, up 21.7% year-over-year, exceeding market expectations; Mac revenue grew 28.7% to $10.35 billion, also significantly surpassing expectations. Services revenue rose to $30.74 billion, up 12.1% year-over-year. Greater China revenue grew 22.4%, showing