Bernstein Flags Memory Cost Concerns as Apple Stock Climbs

Apple's stock price closed at $337.56 on Friday after a 0.49% gain, despite concerns over potential margin compression in the December quarter due to rising memory component prices.

Bernstein analyst Mark Newman maintained his Outperform rating and $370 target for Apple, but highlighted significant challenges looming for the critical holiday shopping period.

Newman's research team found that memory semiconductor pricing could squeeze Apple's profit margins beyond current market expectations. The analysis revealed that DRAM and NAND flash memory account for roughly 90% of a projected $168 annual cost increase for the 256GB configuration of the iPhone 18 Pro Max, representing a substantial escalation for a single component category.

Bernstein's updated model anticipates iPhone gross margins of 40.4%, which falls 390 basis points short of Wall Street's current expectations. The firm's overall company gross margin forecast stands at 46.2%, representing a 50-basis-point shortfall versus consensus estimates.