Apple shares drop 7% as CEO cites memory-chip price surge and slower growth
Apple's stock fell 7% after Tim Cook warned that a sharp rise in memory-chip prices and weaker demand could pressure margins, while the company projected revenue growth below analysts' expectations for the September quarter.
Apple Inc.'s shares slid about 7% on Friday, their steepest one-day decline since March 2020, after the company warned that rising memory-chip costs and slower demand could compress profit margins. The stock briefly fell as low as $301, erasing roughly $475 billion in market value, before closing at $308.91.
Chief executive Tim Cook said the company is facing a "100-year flood" in memory pricing that has squeezed margins and noted that product shortages were driven more by stronger-than-expected demand than by broader supply-chain issues. He also acknowledged that Apple had underestimated demand for its iPhone and Mac lines.
Apple forecast revenue growth of 9% to 11% for the September quarter, below Wall Street's estimate of about 12%. The outlook contrasted with the fiscal third-quarter results, which showed revenue of $109.4 billion and earnings of $2.02 per share, both above analyst expectations. June-quarter iPhone sales reached a record $54.25 billion, while iPad and services revenue showed slower growth.
The earnings call was Cook's last before the planned transition to John Ternus as CEO on Sept. 1. Investors will watch how Apple addresses supply constraints and whether growth can be re-accelerated under the new leadership.