Apple Stock Plunges on Price Hikes, But Analyst Says Market Overreacts

Apple's stock price dropped nearly 6.5% on Thursday after the company announced price hikes for its MacBooks and iPads, citing higher memory and storage costs driven by AI demand.

The price increases ranged from $100 to $300 across various models, with the MacBook Neo now starting at $699 and the iPad Pro Wi-Fi model increasing to $1,199.

However, Deepwater Asset Management's Gene Munster believes that the market is overreacting, saying that investors are pricing in exaggerated 'demand destruction' concerns.

Munster pointed out that Apple's ecosystem lock-in across an estimated 1.5 billion users supports strong pricing power despite the increase, and noted that the average life of a Mac is 4.5 years before it's traded in, which means a $200 increase adds only $3.70 to the cost of ownership per month.