Apple Shares Fall Amid Memory Costs and Supply Pressures

31.07.2026 · By Bernal Fintech Markets Desk

Apple shares fell nearly 10% following its Q3 earnings report, as rising memory costs and supply constraints weighed on its outlook, despite strong revenue and profit results. The iPhone maker warned of ‘100-year flood’ memory prices and slowing growth, which are expected to impact results in the current quarter. Analysts highlighted that while Apple beat expectations on both revenue and earnings, the market priced in much of the growth, leaving little room for further upside.

Apple reported Q3 revenue of $109.4 billion, up 16.4% year-over-year, with iPhone sales rising 21.7%. However, the stock sold off over 8% after the report, as investors focused on the company’s margin pressures. Memory costs are a key concern, with analysts noting that Apple’s gross margin would fall significantly if tariff refunds were excluded. The company faces ongoing supply chain challenges, which are expected to persist as hyperscalers invest heavily in AI infrastructure, increasing capital spending through 2027 and into 2028.

Supply Chain and Memory Constraints

Apple’s supply chain pressures are intensifying as global memory prices surge, driven by high demand from AI and data center investments. Analysts at UBS noted that while Apple delivered an ‘in-line quarter’ with strong iPhone demand, the Services segment underperformed expectations. The company’s ability to manage these costs and maintain margins is under scrutiny, particularly as it faces a more challenging outlook heading into fiscal 2027.

What it means for markets

The decline in Apple shares highlights growing concerns about margin compression and supply chain bottlenecks, which could impact broader tech stocks. Investors are closely watching how Apple navigates these challenges, as its performance often sets the tone for the sector.