Apple stock in focus as CEO Tim Cook spooks with one phrase

Apple (AAPL) CEO Tim Cook and his righthand CFO Luca Maestri channeled their inner Wall Street economist on the tech giant's earnings call late Thursday.

After a rare earnings miss for Apple, Cook and Maestri used some variation of the phrase "challenging economy" seven times on the earnings call. Both are unusual for the mighty Apple.

"The macroeconomic environment this past quarter markedly was more challenging than 12 months ago," Maestri told analysts.

Shares of Apple — which fell substantially in pre-market trading on Friday — nevertheless rallied on Friday.

The economic challenges to which Cook referred could be seen in Apple's earnings.

Apple Earnings Overview

• Revenue: $117.1 billion versus $121.1 billion expected

• Adj. earnings per share: $1.88 versus $1.94 expected

• iPhone revenue: $65.7 billion versus $68.3 billion expected

• Mac revenue: $7.7 billion versus $9.72 billion expected

• iPad revenue: $9.4 billion versus $7.7 billion expected

• Wearables: $13.4 billion versus $15.3 billion expected

• Services: $20.7 billion versus $20.4 billion expected

• Wins: 1) China demand appears to be gaining steam; 2) $50 billion plus in cash on the books; 3) Supply constraints have pretty much ended.

• Misses: 1) No March quarter revenue guidance again; 2) Executive tone negative on the economy; 3) Weak wearables sales due to economic conditions.

Despite the rare miss and cautious tone from Cook & Co., the bulls on the Street are standing pat on the stock.

The collective vibe is that everyone knew the quarter was going to be soft as the China economy slowly reopens and U.S. consumers spent more cautiously. In turn, Apple's latest quarter may be as bad as it gets fundamentally for the iPhone and Mac maker this year.

Or so the bulls are betting.

"Bears will be quick to point out negative sales growth but we note when adjusting for FX that sales and outlook are flat, which is materially better than other consumer electronic companies. Importantly services are also outperforming and Apple’s installed base continues to grow (over 2 billion active Apple devices and iPhone installed base estimated at 1.2+ billion)," Citi analyst Jim Suva said in a note to clients.