Apple shares rose 2% on Friday after a rosy forecast fuelled hopes of an iPhone sales rebound, even as tough competition and a lack of AI features weigh on demand in key market China.

The tech giant’s sales of apps and services helped profit grow 7 percent from a year ago, even as the company contended with slumping sales in China.

The company has heavily advertised AI features since the latest iPhones were released in September.

Apple Inc. gave a reassuring revenue forecast for the current quarter, helping boost shares of the world’s most valuable company after its holiday results showed jarring declines for China and the iPhone.

Apple reported its latest quarterly earnings results Thursday, revealing all-time record-breaking sales for its October-December 2024 period. Wall Street forecast earnings per share (EPS) of $2.34 on $124 billion in revenue,

Apple Services revenue, which includes the App Store, Apple Pay and Apple Card; subscription services such as Apple TV+, Apple Music and iCloud as well as advertising, reached $26