Apple Shares Decline as Rising Memory Costs Pressure Gross Margins
Apple (AAPL) reported record September quarter revenue of $114.5 billion, a 12% increase year-over-year, driven by an impressive 17.5% surge in iPhone revenue to $57.6 billion. Despite beating Wall Street estimates for both top and bottom lines, the company's stock fell approximately 2% due to concerns regarding future profitability. The primary headwind is a projected contraction in gross margins for the upcoming holiday quarter, which management expects to fall to between 45% and 46%. This decline is attributed to unprecedented increases in memory chip prices driven by AI infrastructure demand. While high services margins provide some cushion, investors are wary of how rising component costs will impact earnings given Apple's premium valuation.
Tickers: $AAPL
Topics: earnings beat gross margin guidance iPhone revenue memory chip costs
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Part of the story Rising Memory Chip Costs Driven by AI Demand Threaten Apple Profit Margins and Consumer Pricing (7 articles)