Ternus Takes the Helm: Apple's Memory Chip Crisis and High-Valuation Risk

Apple's new CEO John Ternus is inheriting a complex situation from his predecessor Tim Cook. Rising memory chip prices are causing significant issues for Apple, which Cook described as a '100-year flood' in their last earnings call.

Cook noted that Apple has already raised prices on some products and may not be able to stop at just a few product lines if prices continue to rise. This could alienate consumers who are already stretched thin.

To mitigate the effects, Apple is decreasing costs on other components. However, this might not be enough to offset the rising memory chip prices.

Apple's stock price is currently trading at 35 times earnings, which is higher than its peers in the S&P 500 and Nvidia. This high valuation makes it vulnerable to a downturn if Apple's growth slows down or prices continue to rise.