Out of memory. We’re way behind when it comes to AI. Customs trouble. None of that seems to matter to Apple. The company continues to sell large numbers of iPhones, especially in China, where they’re disappointing. iPhone sales in China rose 23% in the first nine weeks of 2026, according to research firm Counterpoint, compared to a 4% year-over-year decline in China’s overall smartphone market. “That’s exactly the opposite of what everyone was saying,” Jim Cramer said Thursday. So much for the idea that Apple is losing market share and can’t compete in its second-largest market. The tech giant once again proved skeptics wrong — just as it did in the holiday quarter, when sales across Greater China rose 38% to $25.53 billion, beating expectations by about $4.7 billion. Enthusiasm for the iPhone 17 lineup, record upgrades, and double-digit growth in switchers led to iPhone’s best quarter ever in China. Memory Apple attracted more customers in China this year because it toed the line on pricing, according to a Thursday report from Counterpoint. Competitors in China have been forced to raise prices to mitigate the rising cost of memory in their devices. The explosive spread of artificial intelligence is causing a large-scale memory shortage worldwide. Smartphones have memory chips that enable multitasking and functionality, and storage memory for your operating system, apps, photos, and files. “Perhaps this shows that (Apple) is better able to manage memory costs compared to competitors who have to raise prices,” Jeff Marks, director of portfolio analysis at Investing Club, said during a Thursday morning meeting. That was certainly the case in Apple’s December quarter. We’ll see what happens when Apple releases its current March quarter results in about six weeks. There are three reasons why Apple will have an advantage over its rivals going forward. High company-wide profit margins allow Apple to absorb costs. Even the decision to take a short-term hit to hardware profits (which hasn’t happened yet) would be a strategic trade-off to bring new iPhone users into Apple’s ecosystem and drive long-term revenue from its increasingly important high-margin services business. Apple has been signing long-term memory contracts with suppliers for some time, allowing it to keep prices down before they skyrocket. CEO Tim Cook briefly agreed with that idea during a recent earnings call. “As always, we will consider various options to address it,” he said. Finally, Apple gets its memory from suppliers like TSMC at the lowest prices. Because those suppliers are too big to ignore. It’s a big risk for TSMC to bet billions of dollars in revenue on a small tech company with unpredictable orders when it can count on Apple’s hardware cycles. Artificial intelligence memory isn’t the only way Apple can overcome headwinds and silence skeptics. Look at the progress of artificial intelligence. Despite high expectations, Apple’s AI rollout, implemented in stages from 2024 to most of 2025, has been disappointing. Since then, the company has been trying to bounce back. Attempting to implement AI in-house brings one problem after another, from functionality delays to key personnel leaving the company. That story changed in 2026. In January, Google and Apple announced a multi-year partnership in which Google’s Gemini AI and cloud will power Apple’s artificial intelligence capabilities, including the super-smart Siri. Apple is expected to pay Google about $1 billion a year in royalties, but that pales in comparison to the hundreds of billions of dollars companies are spending in the AI arms race. “This is a great opportunity to understand that by making a deal with Gemini, they happen to have the best AI available,” Jim Cramer previously said. This is a huge benefit for both club names. Additionally, Alphabet’s Google still pays a lot of money for search priority on Apple devices. A federal court ruling last year allowed this continuation. The government appealed the ruling last month. Tariffs Apple was also ultimately able to avoid President Donald Trump’s tariffs. The stock price has been hampered by higher taxes, especially after President Trump threatened to hit Apple with a 25% tariff on iPhones made overseas last May. A few months later, Mr. Cook returned to the good side of the administration. Apple announced in August that it would commit to investing $100 billion in U.S. manufacturing over the next four years, on top of the $500 billion it had already committed to. Mr. Cook’s ability to navigate this political quagmire to contain tariff risks was certainly impressive. Conclusion Once again, we reiterate our “proprietary, no deal” position with Apple. After all, as Jim has said in the past, the company makes “the greatest product in the world,” with the iPhone being its biggest source of revenue. The club’s stock rating is 2, equivalent to Hold. Apple’s price target is $300 per share, suggesting an upside of about 20% from Thursday’s closing price. (Jim Cramer’s charitable trust is long AAPL, GOOGL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. 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