Apple reported record iPhone sales and beat analyst expectations on every metric in its latest quarterly report, but investors sent the stock down 2.3% in after-hours trading. The drop came amid concerns over rising memory-chip costs and the end of tariff refunds, which are squeezing the company's profit margins.
The company is facing a component shortage made worse by the artificial intelligence boom, according to reports. Memory chips are in high demand as AI systems require large amounts of data storage, and supply has not kept up. Apple is scrambling to find solutions, and CEO Tim Cook has expressed a desire to bring on more memory suppliers.
The higher memory prices are also hitting other major tech companies, including Amazon. After Cook's comments, shares of Micron, a major memory chip maker, fell, reflecting investor uncertainty about how the supply situation will affect prices and demand.
Apple's strong sales figures showed that consumer demand for iPhones remains robust, but the company now faces the challenge of protecting its profitability as input costs climb. Investors will be watching to see whether Apple can secure additional memory supply and absorb the higher expenses without losing its competitive edge.