AI-Driven Memory Shortage Wrecks Apple's Stock Price

Apple's latest earnings report was nearly flawless, with third-quarter revenue reaching $109.42 billion, up 16% year-over-year, and diluted earnings per share hitting $2.02, a 29% increase from last year.

This marked Apple's strongest June quarter ever, exceeding Wall Street expectations across all key metrics. However, the company's stock price plummeted nearly 10% after the report, erasing over $500 billion in market value.

The reason for this decline was not the previous quarter's performance but rather Apple's outlook for the future. Management guided for a 9-11% revenue growth rate in the September quarter, below Wall Street's consensus estimate of 12%. Gross margin guidance also fell to 47-48%, indicating potential supply chain constraints.

Cook stated that the company is facing significant supply constraints and emphasized the global competition for semiconductor resources driven by AI. This shift has exposed Apple's vulnerability in securing memory production capacity, which is now being redirected towards AI data centers.