Apple Stock Slides ~10% as Cook Warns of Memory Costs
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- Apple stock fell just shy of 10% on July 31, 2026, after CEO Tim Cook warned during the Q3 earnings call that memory costs rose significantly in the quarter and will increase further.
- Apple posted Q3 EPS of $2.02 on revenue of $109.4 billion, beating estimates of $1.89 EPS and $108.8 billion, with iPhone revenue of $54.2 billion topping the $53.5 billion analysts expected.
- Greater China revenue of $18.8 billion fell short of the $19.5 billion analyst estimate, while Services revenue came in at $30.7 billion versus the $31.3 billion projected.
- Apple has already raised prices on Macs and iPads because of the memory crunch, with iPhone price increases expected this fall when next-generation models debut.
- Jefferies analyst Edison Lee estimated that rising memory costs could push iPhone gross margins from 38% down to 34.5% in the second half of 2026.
- KeyBank Capital Markets analyst Brandon Nispel warned that iPhone price hikes risk slowing unit growth, user growth, and ultimately Services revenue.
- John Ternus takes over as Apple CEO from Tim Cook on September 1, making the Thursday earnings call Cook's final one in the role.
Why it matters: Apple's near-10% drop despite an earnings beat shows investors are pricing the memory cost trajectory, not headline numbers. With incoming CEO John Ternus inheriting margin-squeezed products and forced iPhone price hikes this fall, Apple risks trading premium unit volumes for slightly higher per-device margins — a trade KeyBank's analyst says could bleed into Services revenue if user growth slows.
