Apple (AAPL) is growing like an AI spender. It is not spending like one.

Revenue jumped 16% to $109.4 billion in the June quarter, powered by a 22% rebound in iPhone sales and 29% growth from the Mac. Earnings per share rose 29% to $2.02, comfortably beating Wall Street’s forecast.

Apple also reported a gross margin of 50.1%, meaning the company kept just over half of each sales dollar after the direct costs of producing its devices and services.

That headline needs an asterisk. Tariff refunds added roughly two percentage points to gross margin, putting the underlying figure closer to 48.1%.

Even after stripping out that boost, Apple delivered the combination of faster growth and strong profitability without an enormous AI infrastructure bill.

Microsoft (MSFT), Alphabet (GOOGL), Meta (META), and Amazon (AMZN) are pouring hundreds of billions of dollars into chips, data centers, and power infrastructure.

That spending can pay off. Microsoft’s record $41 billion quarterly buildout came alongside faster Azure growth, while Google Cloud recently delivered accelerating growth and widening profitability.

But the bills keep rising. Apple is taking another route.

That route is cheaper, but it is not free.

Apple expects revenue growth to slow to between 9% and 11% in the September quarter as foreign exchange and worsening supply constraints weigh on the iPhone, Mac, and iPad.

Margins face an even bigger squeeze. Apple guided to a gross margin of 47% to 48%, including another one-point benefit from tariff refunds. Strip that out, and the midpoint falls to roughly 46.5%.

Management said more than all of the decline from June’s underlying 48.1% margin is explained by higher memory costs. Apple expects those costs to rise again this quarter and keep climbing beyond September.

Its research and development spending jumped 32% to $11.7 billion, so this is hardly a company starving AI of investment. Apple is relying on a mix of on-device processing, its own servers, and third-party cloud capacity rather than building the same vast public-cloud network as its rivals.

CEO Tim Cook acknowledged that Siri AI could eventually make Apple more capital intensive. For now, management said the cost — and how much Apple can recover through paid iCloud upgrades — remains uncertain.

The quarter also showed where Apple’s latest burst of growth came from.

Services revenue rose 12% and missed expectations. Hardware did the heavy lifting, with iPhone growth running well ahead of services for a third straight quarter.