Morning Edition · Friday, July 31, 2026BREAKINGPublished at 11:03 AM EDT · New York

Apple Falls as Much as 10% After Warning That AI-Driven Component Shortages Will Curb Sales

The company beat estimates with record June-quarter revenue of $109.42 billion, but its forecast of 9% to 11% growth for the current quarter fell short of the roughly 12% analysts expected, erasing more than $300 billion in market value.

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Apple shares dropped sharply on Friday, July 31, falling by roughly 9% to 10% in early trading and cutting more than $300 billion from the market value of the largest US company, according to Chinese financial outlet Sina. The decline came despite results that beat Wall Street estimates.

For the quarter ended June 27, Apple reported revenue of $109.42 billion, up 16.4% and a June-quarter record, with diluted earnings per share of $2.02, up about 29%. iPhone revenue rose 21.7% to $54.3 billion, and every geographic segment grew by double digits, including Greater China, up 22%.

Investors focused instead on the outlook. Management guided to September-quarter growth of 9% to 11%, below the roughly 12% consensus, and said gross margins would also come in weaker than expected. Chief Financial Officer Kevan Parekh told analysts that supply constraints affecting iPhone, iPad and Mac availability would increase significantly from the prior quarter. Chief Executive Tim Cook, in his final earnings report before John Ternus becomes CEO on September 1, said demand was not the problem and that the company was struggling to secure enough parts from an unusually inflexible supply chain served by only three major memory suppliers.

The pressure traces to the buildout of artificial intelligence data centers, which analysts at Barclays said is prioritizing leading-edge chipmaking capacity for AI over Apple's products. Memory is the sharpest squeeze. With data centers now consuming an estimated 70% of the world's memory chips, DRAM contract prices are projected to rise 13% to 18% and NAND flash 10% to 15% in the third quarter, per market researcher TrendForce as reported by Tom's Hardware, as Samsung, Micron and SK Hynix shift output toward higher-margin AI server parts.

What this means

The same AI capital spending that has lifted memory makers and chip suppliers is now raising input costs and limiting supply for consumer-hardware companies that compete for the same DRAM, NAND and leading-edge wafer capacity. Apple, with the scale to command priority allocation, is signaling that even the strongest device maker faces margin compression and unit constraints. Exposed alongside it are PC makers, smartphone vendors and other electronics manufacturers that lack captive memory supply, while memory producers and AI infrastructure builders capture the reallocated capacity. The channel is component pricing and allocation flowing directly into hardware gross margins.

What to watch

Whether Ternus, on taking over September 1, signals new long-term memory supply agreements or pricing pass-through to consumers.
Third-quarter guidance from PC and smartphone rivals such as Dell, HP, Samsung and Xiaomi for similar component-cost warnings.
DRAM and NAND contract price direction into the fourth quarter, and any capacity additions from Samsung, Micron and SK Hynix.

Observations to monitor, not financial advice.

4 sources

Synthesized from: Reuters (via WHBL) · CNBC · Sina Finance · Tom's Hardware