Apple shares tumble as company raises iPad and Mac prices amid memory cost surge

Apple's shares dropped 6.12% on Thursday, the steepest one-day decline in more than a year, erasing about $265 billion of market value. The decline followed the company's announcement that it would increase prices for several iPad and Mac models, with some hikes reaching $200.

In a statement to the press, Apple said the rapid expansion of AI data centers has caused an "extraordinary surge in demand for memory and storage" and that it had "never seen a component price increase this much, this quickly." It added that the company had previously shielded customers from the cost pressure but now needed to adjust prices for products such as the MacBook Neo, MacBook Air, iMac and iPad.

"Price increases are unavoidable given the memory crunch," CEO Tim Cook told the Wall Street Journal, adding that Apple is working to mitigate the impact.

The price adjustments took effect immediately and were reflected on Apple’s online store by midday. The hikes did not affect the iPhone, Apple Watch or AirPods, but Apple TV prices rose by $70.

Analysts noted the moves were broader and larger than expected. Evercore analyst Amit Daryanani said the increases ranged from 17% to 25% for core Mac and iPad models and highlighted the surprise of an intra-cycle price rise. JPMorgan Chase analysts warned the scale of the hikes could pressure sales.

The memory shortage, driven by a limited number of suppliers and heightened AI-related demand, is also affecting other tech firms; Microsoft’s Xbox division announced similar price increases for its consoles.