Apple shares fell sharply after the company announced significant price increases for several MacBook and iPad models. CEO Tim Cook previously stated unavoidable hikes, citing soaring memory and storage chip costs driven by the AI infrastructure buildout. The company acknowledged the unwelcome news, linking it directly to component prices that have quadrupled recently. This comes amid investor concerns over Apple’s AI strategy and an upcoming CEO transition.
Shares in Apple Inc. (AAPL) dropped as much as 5% on Thursday, erasing over $215 billion in market capitalization. The decline coincided with the company announcing price hikes on core products, including MacBooks and iPads.
Last week, CEO Tim Cook told The Wall Street Journal that “price increases are unavoidable.” He cited the AI infrastructure buildout which is squeezing the global supply of critical components.
Specific increases include the MacBook Air 512GB model rising from $1,099 to $1,299. The iPad Pro Wifi 256GB will increase from $999 to $1,199.
The company stated, “The consumer electronics industry is facing an unprecedented challenge.” It attributed this directly to an extraordinary surge in demand for memory and storage from AI data centers.
Apple added that it has “reached a point where we need to begin raising prices on a number of products.” It left the door open for more increases while working to find solutions.
Memory and storage prices have quadrupled in the past three quarters, increasing production costs. Conversely, chip companies like Micron (MU) and AMD have benefited from the shortage and heightened demand.
Apple remains reliant on external chip technology that has seen shortages this year. This dependency contrasts with its efforts to develop self-sufficient silicon.
Furthermore, lingering concerns surround Apple’s broader artificial intelligence strategy. Investors are cautious about the lack of a firm launch date for a major Siri upgrade announced recently.
The realization that key features may rely on third-party AI models has tempered expectations. This narrative shift occurs ahead of a rare, generational CEO transition scheduled for September.
