Apple Inc. shares tumbled 9% on Friday, July 31, erasing around $373 billion in market capitalisation, despite the company reporting its best-ever Q3 earnings.
This marks the largest dip in Apple’s stock since 2020 and comes after the company issued a weaker-than-expected revenue forecast for the current quarter.
The company expects revenue growth of 9% to 11%, falling short of Wall Street’s consensus estimate of around 12.1%.
However, while Apple’s third-quarter financials were remarkable in most respects, with revenue reaching $109.4 billion, which is a rise of 16% compared to the previous year, when it comes to iPhone sales, their numbers have increased by 22%, investors are paying attention to what is under the hood. While services revenue was $30.7 billion, which is slightly lower than the expected $31.3 billion,
and the Greater China revenue was $18.8 billion, which is also lower than the expected $19.5 billion.
It seems like the major reason behind this selloff is an increase in costs associated with memory and storage due to the global expansion of the AI infrastructure. As mentioned by CEO Tim Cook on the earnings call, Apple has been paying more for memory for the last three quarters and will continue to do so in the September quarter.
Apple’s CEO Tim Cook said: “If you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business.”
However, Apple has already increased prices of Macs and iPads, but the iPhone has been saved from that price increase. Apple will likely introduce increased prices on its new generation iPhones as they will be launched by the company at its September annual showcase event.
Now investors’ eyes will be on the leadership change, as Cook will be retiring from the CEO position in September and the launch of Apple’s first foldable iPhone.
Although there was a drop on Friday, Apple’s stock has still managed to rise around 12% in the year-to-date period.
2026-07-31 21:48:00
