Apple CEO Tim Cook gestures during an event at the Steve Jobs Theater on the company’s campus in Cupertino, California, on September 9, 2025.
Manuel Orbegoso | Reuters
The global memory crisis has had a major impact on tech companies’ earnings season, which reached its climax this week. apple CEO Tim Cook warned that this was just the beginning.
“We believe memory costs will increase the impact on our business,” Cook said during the question-and-answer portion of Thursday’s earnings call, after repeatedly telling analysts that the company faced “supply constraints” in the latest quarter. “We will continue to evaluate.”
Apple’s earnings report, which included near-universally strong results and a better-than-expected revenue outlook, came a day after Meta and Microsoft said in their earnings calls that rising memory prices contributed to higher capital spending forecasts for this year.
Microsoft CFO Amy Hood said on a conference call that she expects capital spending to reach $190 billion in 2026, up 61% from last year, and expects the impact of higher component prices to be $25 billion. Meta noted that “expectations for higher component prices” were a factor in increasing capital spending forecasts from a high of $135 billion to as much as $145 billion.
Across the technology industry, executives are expressing concern about soaring memory prices and facing a global demand crisis due to insatiable demand for artificial intelligence infrastructure. of each generation Nvidia Chips, the processors at the center of the AI boom, are equipped with more memory, further squeezing an already stressed market.
memory maker micronwhose stock price has risen about 570% over the past year, is working to increase production capacity, along with competitors Samsung and SK Hynix. Memory for consumer devices like PCs and smartphones is becoming increasingly scarce, and therefore much more expensive, as AI chips and data centers suck up massive amounts of supply.
That’s why Apple’s conference call was such a big deal.
Cook said Apple’s fiscal second quarter sales growth of 17% exceeded expectations “despite supply constraints.”
He said the impact in the December quarter was “minimal” and that the March quarter was a little harder. For the quarter ending in June, Cook said some Mac models will be significantly impacted “given the continued high demand we’re seeing.”
Analysts wanted to know what Apple planned to do about this, but didn’t get many details. Cook said several times that he would “consider a wide range of options.”
Since January, when AI memory started selling out, Wall Street has focused on Apple and Dell How will you deal with the memory shortage? Will you be forced to raise prices or cut margins?
“Apple has shown that even the best operators can’t completely escape memory pressure,” said Jake Behan, head of capital markets at Direxion. “Tim Cook’s warning that costs will rise ‘significantly’ in the coming quarters speaks to how real the AI-induced shortage is becoming for the entire industry.”
Apple has largely avoided raising prices so far. The company announced a number of new products in March, including the iPhone 17e, a refreshed iPad Air laptop with an M4 chip in 11-inch and 13-inch sizes. It also announced the MacBook Neo, a low-cost laptop that Cook acknowledged was in higher demand than expected.
The memory challenge will soon fall to Apple’s longtime hardware chief, incoming CEO John Ternus, who will take over as Cook’s assistant in September.
Eating costs?
Morningstar analyst William Kerwin told CNBC in an email that one option for Apple would be to enter into a long-term supply contract to secure a better price. He focused on being a memory maker. sandisk discussed “a number of similar new agreements” during Thursday’s earnings call.
Needham analyst Laura Martin said she didn’t know what Mr. Cook was referring to when he suggested the company consider its options, but said it’s not good for a company with limited production capacity “for a company with core capabilities in hardware.”
Wall Street took the news in stride, reacting positively to Apple’s forecast that sales would rise between 14% and 17% this quarter, pushing the stock higher. Analysts had expected sales to rise 9.5% to $103 billion, according to LSEG.
Gil Luria, an analyst at DA Davidson, told CNBC that Apple was able to avoid a price increase for the iPhone, but “arrangements with memory suppliers may need to change.” He said Apple’s options include reducing the amount of memory in its products, increasing the price of its handsets, or absorbing some of the additional costs to absorb lower gross margins.
Nabila Popal, an analyst at IDC, said that while the breadth of choice may be related to higher iPhone prices, it is not necessarily equally distributed across all models.
“Next spring, I think the base model will remain the same and we will focus on Pro/Max price increases,” she said in an email.
Some analysts said the memory shortage presents an opportunity for Apple to gain market share this year while other manufacturers face even greater challenges.
Morningstar’s Mr. Kerwin said of the results, “I’m impressed with Apple’s profitability amid significant memory price inflation.”
Direxion’s Behan agreed that Apple is in a better position than everyone else.
“Apple’s size, balance sheet strength and relatively conservative approach to capital spending will give it more flexibility than other companies to overcome these constraints over time,” he said.
WATCH: Apple blames supply chain constraints for iPhone failure.
