Apple Stock Drops Amid Supply Shortages and Soaring Component Costs

Apple's stock dropped on Friday after the company warned of supply shortages and soaring component costs that delayed sales and dented its profit margins.

The iPhone maker reported a 16% year-over-year revenue growth to $109 billion in its fiscal third quarter, which ended on June 27. This was driven by a 22% surge in iPhone sales to $54 billion, with Mac sales also strong at $10 billion due to the launch of Apple's more affordable MacBook Neo.

However, investors focused on Apple's lackluster sales outlook, with management guiding for revenue growth between 9-11%. This fell short of Wall Street's projection of 12% growth. The company's chief financial officer, Kevan Parekh, warned that supply shortages would worsen and impact iPhone, Mac, and iPad sales.

The booming demand for artificial intelligence infrastructure has driven up memory chip costs, weighing on Apple's margins and forcing it to raise prices. But CEO Tim Cook said the most pressing component shortages were due to higher-than-expected sales of iPhones and Macs, which is a 'good problem to have' that Apple will eventually rectify as it works to bolster its supply chain.