Apple Stock Drops Nearly 10% as CEO Warns of Memory Shortage Impact
Apple's (AAPL) stock fell nearly 10% on July 31, 2026, after CEO Tim Cook warned during the third-quarter earnings call about rising memory costs and supply chain constraints. While Apple reported better-than-expected revenue and EPS of $2.02 per share with total sales reaching $109.4 billion, it highlighted ongoing challenges in managing increased component prices that are squeezing margins. Cook noted that iPhone and Mac demand has outpaced expectations but warned the company is struggling to meet this due to inflexible supply chains. Analysts like Edison Lee of Jefferies estimate memory cost increases could reduce iPhone gross margins from 38% to 34.5%. Brandon Nispel of KeyBank Capital Markets raised concerns that potential price hikes on iPhones might slow unit and user growth, impacting Apple's services revenue. Apple announced a new leasing program called the Apple Upgrade service as part of its strategy to address these challenges. The earnings call marked Cook’s last in his role before John Ternus takes over leadership starting September 1.
Tickers: $AAPL
Topics: Apple earnings call memory shortage stock price decline supply chain issues