Apple (AAPL) is scheduled to announce its third quarter earnings after the bell on Thursday, as Wall Street looks for signs of movement on the company’s AI plans and a view into how much tariff-related costs are eating into its margins.

Apple could also face additional levies if President Trump moves forward with his threat to impose a 25% tariff on iPhones unless Apple begins producing them in the US.

At the same time, Apple is dealing with concerns about the impact of Google’s antitrust lawsuit on the company’s $20 billion per year agreement to use Google Search as the default search option in the Safari browser and Siri.

But there are positives on the horizon as Apple gears up for its annual September iPhone launch event. It’s expected to debut a redesigned, slimmer iPhone that could boost the company’s phone sales in Q4 and the year ahead.

For the third quarter, Apple is expected to report earnings per share (EPS) of $1.43 on revenue of $89.22 billion, according to Bloomberg consensus estimates. The company saw EPS of $1.40 and revenue of $85.7 billion in the same quarter last year.

BofA Global Research analyst Wamsi Mohan wrote in a research note Monday that investors will likely focus on Apple’s tariff costs and their impact on Q3 and Q4 gross margins. While margins could face pressure in the near term, a thinner iPhone could help drive margins higher, thanks to an anticipated higher starting price.

Apple is expected to post Q3 iPhone revenue of $39.8 billion, up from $39.2 billion in 2024. Services revenue should come in at $26.8 billion, an improvement from the $24.2 billion Apple posted last year.

Apple’s Services revenue could soon come under pressure, though. The federal judge overseeing Google’s (GOOG, GOOGL) search antitrust case is expected to rule on the “remedies” phase of the trial, which will spell out what the company has to do to correct its monopolistic behavior.

That could include ending exclusivity deals like the one it has with Apple. Unfortunately for the iPhone maker, that $20 billion agreement makes up a large chunk of the company’s Services revenue. Losing it could spook investors.

Apple is also facing continuing criticism for its slow AI rollout. Wedbush analyst Dan Ives has called for the company to purchase AI startup Perplexity AI (PEAI.PVT).

“It’s time for Cook and Cupertino to face the new reality of this quickly morphing AI driven tech landscape … because if they do not change it will be a historic strategic black eye for Apple, in our view,” Ives wrote in an investor note ahead of earnings.