Apple Inc. (NASDAQ:AAPL) shares closed more than 3% lower on Friday following the company’s reported Q2 results. While both EPS of $1.52 and revenue of $97.28 billion beat the Street estimates of $1.42 and $93.98 billion, respectively, the market reacted on increased supply-chain and demand uncertainty (from China) looking forward.

Analysts at Deutsche Bank said they remain impressed with the company’s gross margins in a challenging market environment and with Services continuing to outgrow the rest of the business and the company benefitting from a mix shift towards higher-margin products, they believe the company can sustain these better gross margin levels going forward.

While the company did not provide revenue guidance, the analysts believe the biggest variable for Q3 will end up being the impact on consumer spending in China from the COVID-19 lockdowns, with the company already sizing the headwinds from FX, Russia and supply chain on revenue growth.