Apple CEO Tim Cook moves as Apple holds an event at the Steve Jobs Theater on its campus in Cupertino, California, US Sept. 9, 2025.
Manuel Orbegozo Reuters
The world’s memory crisis played a huge role in the tech earnings season, which peaked this week. an apple Chief executive Tim Cook warned that it was just the beginning.
“We believe the cost of memory will increase the impact on our business,” Cook said during the Q&A portion of his company’s earnings call Thursday after repeatedly telling analysts the company faced “constraints” in the latest quarter. “We will continue to evaluate this.”
Apple’s earnings report, which included a near-beat across the board and better-than-expected revenue guidance, came a day after Meta and Microsoft said in their results that higher memory prices contributed to their higher forecast for annual capital expenditures.
Projecting $190 billion by 2026, up 61% from last year, Microsoft CFO Amy Hood said in a conference call that she expects a $25 billion impact due to higher component prices. Meta noted that “expectations for higher component prices” contributed to its higher forecast from a high of $135 billion to a total of $145 billion.
Across the technology world, executives have been expressing their concerns about rising memory prices, which are facing global challenges due to the endless demand for artificial intelligence infrastructure. Each generation of Nvidia chip, the processor at the heart of the AI boom, is adding more memory, further slowing an already stressed market.
memory maker Micronits stock has risen nearly 570% in the past year, it has been working to add capacity, as have rivals Samsung and SK Hynix. As AI chips and data centers absorb more supply, the memory of consumer devices such as PCs and smartphones is becoming more and more expensive.
That’s why it was a big topic on Apple’s phone.
Cook said Apple’s 17% revenue growth in the fiscal second quarter exceeded his guidance “despite supply issues.”
He said the impact in the December quarter was “small” and that there was more friction in the March period. For the quarter ending in June, Cook said the biggest impact will be on a few Mac models “given the high levels of demand we’re seeing.”
Analysts wanted to know what Apple would do in response, but didn’t get much in the way of specifics. Cook said on several occasions, “We’re going to look at a variety of options.”
Since January, when AI memory went on sale, Wall Street has been questioning consumer electronics companies such as Apple and Dell how they will deal with the memory shortage, and if they will be forced to raise prices or cut margins.
“Apple has shown that even the best processors can’t completely escape memory,” said Jake Behan, head of capital markets at Direxion. “Tim Cook’s warning of ‘very high’ costs in the future tells you how real AI-driven has become in every industry.”
Apple has so far largely avoided price increases. In March, the company announced several new products, including its iPhone 17e, an updated iPad Air laptop with an M4 chip in 11-inch and 13-inch sizes. It also unveiled the MacBook Neo, a low-cost laptop that Cook admitted is in greater demand than he expected.
The memory mess will soon fall into the hands of incoming CEO John Ternus, Apple’s longtime hardware boss who succeeded Cook in September.
Eat the cost?
William Kerwin, an analyst at Morningstar, told CNBC in an email that another option for Apple would be to enter into long-term supply agreements to protect favorable prices. He noted that memory maker Sandisk discussed “a number of new deals like these” in its earnings call on Thursday.
Needham analyst Laura Martin said that while she didn’t know what Cook was talking about when he suggested the company would consider options, it’s not good to see power constraints “for a company with a core competency in hardware.”
Wall Street took the news in stride, reacting favorably to Apple’s forecast for revenue growth this quarter of 14% to 17%, and sending the stock higher. Analysts had expected growth of 9.5% to $103 billion, according to LSEG.
Gil Luria, an analyst at DA Davidson, told CNBC that Apple has been able to avoid overshooting iPhone prices but “the arrangements of memory suppliers may have to change.” He said other options for Apple would be to reduce the memory available in the products, increase the price of handsets, or eat some of the additional costs and maintain lower margins.
IDC analyst Nabila Popal said the range of options may not be related to rising iPhone prices, but they won’t necessarily be evenly distributed across all models.
“I think they will focus on price increases on the Pro/Max while keeping the base model the same next Spring,” he said via email.
Some analysts say the memory crunch represents an opportunity for Apple to gain market share this year as other manufacturers face more serious challenges.
Morningstar’s Kerwin said, regarding the latest results, that he was “impressed with Apple’s profit amid a sharp increase in memory prices.”
Direxion’s Behan echoed the sentiment that Apple is in a better position than just about anyone.
“Apple’s scale, balance sheet strength, and balanced capex approach will likely make it easier than most to weather these challenges over time,” he said.
WATCH: Apple blames iPhone misses on supply chain issues.
