Shares in Apple inc (AAPL) have sunk as much as 5% on Thursday, coinciding with the company’s market capitalization shedding over $215 billion in a single day. This week, the iPhone developer announced expected price hikes for several products due to increasing costs for development. Last week, CEO Tim Cook told The Wall Street Journal that “price increases are unavoidable” as the AI infrastructure buildout squeezes the global supply of memory and storage chips.
Apple today announced price hikes on MacBooks and iPads, as well as numerous other products:
- MacBook Neo entry $599 increasing to $699
- MacBook Air 512GB $1099 increasing to $1299
- MacBook Pro 1T $1699 increasing to $1999
- iPad Air 128GB $599 increasing to $749
- iPad Pro Wifi 256GB $999 increasing to $1199
“The consumer electronics industry is facing an unprecedented challenge,” the company said in a statement. “The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly.” Apple added that it has “reached a point where we need to begin raising prices on a number of products,” leaving the door open to more increases down the line. “We know this is not welcome news, and we are working tirelessly to find solutions,” the company said.
Also Read: Microsoft Stock Flashes Buy Signal After Crashing 25% in a Year
Memory and storage prices have quadrupled in the past three quarters, leading to increased costs for companies like Apple to create their products. On the flip side, chip companies like Micron (MU) and AMD have benefited from the chip shortage and increased demand. Apple (AAPL) remains behind in its efforts to create its own self-sufficient chips; it still relies on the chip technology that has seen shortages this year.
Furthermore, lingering concerns regarding the company’s broader artificial intelligence strategy add to the bearishness behind AAPL stock. Following the annual Worldwide Developers Conference earlier this month, investors remain cautious regarding the lack of a firm, committed consumer launch date for the highly anticipated Siri upgrade. The realization that key agentic features may rely heavily on third-party models under the hood has further deflated the narrative that Apple will act as an independent, high-margin AI powerhouse in the immediate term. Furthermore, this transition comes at a delicate time for corporate leadership, as the market prepares for a rare, generational CEO transition scheduled for September.
