Apple warns memory chip costs rising, shares drop 2.75%
Apple just announced that memory chip prices are shooting up fast, thanks to all the demand from AI data centers.
Apple's new CEO, John Ternus, says these costs will be higher in the fourth quarter of this year (Q4 2026), which means Apple's profit margins are taking a hit.
Investors weren't thrilled, and Apple's shares dropped 2.75% after the news.
Apple revenue up 12% to $114.5B
Even with these rising costs, Apple pulled off a solid quarter: revenue jumped 12% to $114.5 billion, mostly from strong iPhone and Mac Mini sales (though iPads and wearables didn't wow analysts).
To soften the blow of pricier chips, Apple has already raised prices on some devices.
Instead of spending big on its own AI infrastructure, it's playing it safe, teaming up with partners to boost its AI game while keeping cash flow steady.