Apple Stock Takes Hit as Supply Shortages Bite

Apple's stock took a hit on Friday after the tech giant warned of supply shortages and soaring component costs. Despite strong sales, particularly in iPhones and Macs, Apple's revenue growth is decelerating.

The company reported a 16% year-over-year increase in revenue to $109 billion for its fiscal third quarter, which ended June 27. iPhone sales surged 22%, reaching $54 billion, while Mac sales grew 29%, driven by the launch of the more affordable MacBook Neo.

However, Apple's growth is slowing down, and management guided for a 9% to 11% year-over-year increase in revenue for its fiscal third quarter. This fell short of Wall Street's expectations of 12% growth.

Chief financial officer Kevan Parekh warned that supply shortages will likely worsen and impact iPhone, Mac, and iPad sales. The main cause of the shortage is not a regular supply issue but rather higher-than-expected demand for iPhones and Macs, according to CEO Tim Cook.