Apple Plunges 9.7% After Cook's '100-Year Flood' Memory Warning
AAPL sits 49% above its 52-week low of $201.5.
Summary
Apple shares are down 9.7% intraday, erasing roughly $475 billion in market cap, after the company's Q3 earnings call revealed a severe margin squeeze from surging memory prices. Despite record June-quarter revenue of $109.42 billion and a 22% iPhone jump, gross margin guidance of 47-48% for September—implying an underlying ~46.5%—represents 280 basis points of compression across two quarters. CEO Tim Cook called the memory pricing environment a '100-year flood,' with DRAM contract prices up 90-95% quarter-over-quarter entering 2026 and another 60% in Q2. The problem is structural: three suppliers control the DRAM market, and AI-driven demand for high-bandwidth memory is consuming wafer capacity, leaving Apple with no near-term alternatives. This was Cook's final earnings call before becoming executive chairman on September 1. The sell-off follows a 6% drop on June 26, but today's move is deeper and accompanied by fresh detail on the supply chain dynamics. Micron (MU) is directly implicated as one of the three memory suppliers, though the primary impact is on Apple. Analysts are split, with targets ranging from $245 to $380, but the immediate concern is whether memory costs will continue to outpace Apple's pricing power.
At the time of this announcement, AAPL was trading at $300.85 on NASDAQ in the Technology sector, with a market capitalization of approximately $4.4T. The 52-week trading range was $201.50 to $344.57. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Benzinga.