Apple (AAPL) - Get Report  shocked the doubters on Tuesday afternoon when it reported a beat on the top and bottom line for the third quarter, as well as positive guidance. 

The Cupertino, Calif.-based tech giant reported earnings of $1.67 per share, topping consensus estimates for $1.57 per share. Revenue grew 7.2% year-over-year to $45.4 billion, also beating consensus estimates of $44.9 billion. Sales of iPhone units rose 1.6% annually and beat estimates of 40.7 million units. 

Shares of Apple were surging 5.5% to $158.37 in morning trading on Wednesday. The company's stock is up 30% year-to-date. 

Watch:Apple Is Just a Stone's Throw Away From Becoming a $1 Trillion Company

A big surprise for investors was the strength of the company's iPad sales, which now makes up 10.9% of Apple's sales. The company sold 11.42 million units, which handily topped Wall Street estimates of 9.03 million. The iPad segments units sales increased 14.8% year-over-year, while iPad revenue grew 1.9% year-over-year to $5 billion.

This was the first quarter since December 2013 (the fiscal first quarter 2014) that the iPad segment reported year-over-year growth in unit sales and revenue. Apple said the segment was helped out by its new Pro models that launched in June, as well as the use of iPads by educators. 

Apple's services revenue grew 21.6% year-over-year to $7.3 billion. Services now make up 16% of sales, up from 13.3% of sales in the last quarter. Apple said that it wants to double its Services segment over the next four years. While this implies roughly 19% annual growth, William Blair analyst Anil Doradla wrote in a note on Wednesday that he is "incrementally positive" that the company can achieve this goal. 

The company said it expects 2017 fourth quarter revenue to be in the range of $49 billion to $52 billion, which represents 4.6% to 11% year-over-year growth. Analysts were expecting $49.2 billion for fourth quarter revenue. The guidance suggests that the iPhone 8 will launch on time in September, squashing reports that the release would be delayed until November or December due to supply constraints. The general consensus is that Apple looks good heading into the launch of the iPhone 8, which has generated significant consumer interest and should give sales a boost. 

Here's what Wall Street is saying about Apple the day after its blowout earnings report. 

Michael Olson, Piper Jaffray (Overweight, $190 price target)

"The outlook implies that fears of an iPhone X launch delay, and/or limited availability of the device, may have been overblown. We recommend owning AAPL due to growing anticipation around iPhone X and a favorable trajectory for services revenue. . . Our view is that AAPL is well positioned near-term as proximity to iPhone X will capture investor attention and concerns of a delayed or limited availability iPhone X should begin to fade."

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Angelo Zino, CFRA Research (Strong Buy, price target N/A)

"We were most encouraged by an acceleration of Services growth, up 22%, driven by the App Store and iCloud storage. We note iPad and Mac sales grew 2% and 7%, respectively. While China sales fell 10%, we see revenue rebounding by calendar year-end. iPhone sales grew 3.3%, on a 1.6% increase in unit shipments, benefiting from favorable comparables but we think hurt from consumers holding off on purchases ahead of AAPL's 10th-anniversary launch."

Sherri Scribner, Deutsche Bank (Hold, $140 price target)

"Apple delivered upside to results and guidance in a quarter that most investors weren't particularly focused on. The big upside surprise came from iPad sales, while Services also saw improving trends. The focus for investors, however, is the next iPhone launch, with mgmt's guidance implying a relatively normal sequential increase, which may suggest speculation about iPhone delays are unfounded. We felt mgmt delivered a good quarter, but we continue to believe the market is overly optimistic on future iPhone sales. Given a saturated smartphone market, elongating refresh cycles, increased competition in China, and a growing secondary market, we think Apple will have a hard time delivering on Street expectations."

Anil Doradla, William Blair (Outperform, price target N/A)

"Bottom line, we maintain our confidence in Apple following the company's third-quarter results. . . On the iPhone front, while the results were marginally below Street expectations on revenue, we believe the upcoming product cycle refresh should be a positive catalyst to the stock. Furthermore, on a longer-term basis, we remain bullish on the iPhone segment due to a combination of positive demand trends in emerging markets (both China and India), a weak competitive landscape in the smartphone space (with Samsung, the only high-end alternative, witnessing structural challenges), and the company taking an aggressive approach to enabling the device for next-generation applications (such as AR)." 

Tim Long, BMO Capital Markets (Outperform, $180 price target) 

"We believe the optimistic outlook affirms our expectations that the premium iPhone "Pro" will launch and ship alongside the standard "S" refresh in September, though initial volumes are likely to be extremely constrained. . . We reiterate our Outperform rating on AAPL shares, as we believe near-term performance will be driven by a strong refresh cycle, while long-term growth will be fueled by the steadily growing iPhone base, which will drive upgrades, increasing Services contribution, and attach rate for accessories such as AirPods."

Watch:Apple Shakes Off Concerns About Its Brand New iPhone

Maynard Um, Wells Fargo Securities (Market Perform, $150 price target) 

"Nonetheless, our interpretation is that the new iPhone should generally be on time though we think could still see constraints. Further constraints beyond Sept could put risk to Dec quarter. Ultimately, we expect Apple to be able to navigate its numbers over the next two quarters though with Dec numbers already elevated and relatively high expectations, we think further material upward momentum to estimates is challenging... While we see the biggest risk being on sentiment with Apple perceived to be a relatively safe stock through year end, we also believe shares are already embedding high expectations, which presents some volatility risk, in our opinion."

T. Michael Walkley, Canaccord Genuity (Buy, $180 price target)

"We believe Apple continues to grow its leading market share of the premium-tier smartphone market with double digit growth of its installed base during the quarter. . . We anticipate a stronger upgrade cycle in C2018 with the 10-year anniversary iPhone 8, as our surveys indicate strong consumer interest in and anticipation for new iPhones anticipated to launch in September."

Andy Hargreaves, KeyBanc Capital Markets (Sector Weight, price target NA)

"The business remains healthy and is a potential beneficiary of tax reform. However, we believe the current valuation balances the potential for upside in the coming cycle with the likelihood for a longer-term slowdown in growth related to high-end smartphone market saturation and diminished value in incremental innovation."

Andrew Uerkwitz, Oppenheimer (Perform, price target NA)

"We are encouraged by Apple's ability to retain and grow its paying subscribers. However, our concerns regarding its overall gross margin and its ability to recover share in China remain unanswered. . . Given that very little information regarding the next iPhone release (date/magnitude) can be inferred from the June call, we believe investors will stay put. The debate over potential margin compression and share improvement in China will likely last for another 6 months or longer."

Rod Hall, JPMorgan (Overweight, $176 price target)

"Apple reported a beat and raise quarter which featured both a huge iPad beat and implied better iPhone revenues in the September quarter. We believe the better iPhone outlook likely relates to the two new LCD "7s" models we expect to ship normally in September while the OLED "Pro" model still looks more likely to impact December quarter numbers. The stock is rebounding to "pre delay" levels on this though we believe the investment story runs through 2018 as pent up demand for a refreshed iPhone portfolio drives volumes for an extended period."

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