Apple Inc.
Shares fell 9.7% during Friday's morning trading, wiping roughly $475 billion off a market capitalization that stood near $4.9 trillion at Thursday's close.
That is Apple's deepest intraday drop since March 2020.
The gap between those two facts is a component Apple does not make, cannot substitute and no longer prices.
Why is Apple Selling Off Friday
Revenue landed at $109.42 billion, up 16% from a year earlier and ahead of the $108.65 billion Wall Street expected. Earnings came in at $2.02 per share against a $1.89 consensus.
Company gross margin was 50.1% in the June quarter, including roughly 2 percentage points of tariff refund benefit.
Adjusted, that is 48.1%. In the March quarter it was 49.3%.
Guidance for the September quarter is 47% to 48% including about 1 point of refund benefit, which puts the underlying figure near 46.5%.
That is 280 basis points of compression across two quarters.
The Sentence That Moved The Stock
Chief Financial Officer Kevan Parekh told analysts that more than 100% of both legs of that decline is explained by a single input, with carry-in inventory and cheaper non-memory components partly offsetting.
Memory did all of it.
Chief Executive Tim Cook said Apple raised prices reluctantly because it is dealing with what he characterised as "a 100-year flood on the memory pricing with exponential increases in memory prices."
It was Cook's final earnings call as chief executive. He becomes executive chairman on Sept. 1, with hardware chief John Ternus taking over.
Apple guided September revenue growth of 9% to 11%, below the 12% consensus, with 2.5 percentage points of that shortfall coming from currency.
Three Suppliers, No Alternatives
Memory means DRAM and NAND flash, the chips that hold data while a device is running and after it powers down. Every iPhone, Mac and iPad ships with both.
Cook was unusually direct about the structure underneath the problem.
The DRAM market has three suppliers. More would help availability, he said, and possibly price, and Apple is evaluating all options.
Those three are Samsung Electronics Co.
On high-bandwidth memory, the stacked DRAM feeding AI accelerators, the two Korean firms alone hold roughly 78% of the market, according to Counterpoint Research.
Every gigabyte routed into HBM consumes roughly three times the wafer capacity of standard DDR5.
The AI build-out is not competing with Apple for finished chips. It is competing for the fabs that make them.
Conventional DRAM contract prices rose 90% to 95% quarter over quarter entering 2026 and roughly 60% again in the second quarter, according to TrendForce, which projects a further 13% to 18% in the third.
A bakery can be the best in the city and still lose money when flour triples.
How The Street Reacted
According to Benzinga Analyst Ratings, target revisions on Apple stock went both ways.
Goldman Sachs' Michael Ng cut to $360 from $370 and kept Buy. Morgan Stanley's Erik Woodring moved to $360 from $364, staying Overweight.
Barclays' Tim Long cut to $245 from $253 and stayed Underweight, the lowest target on the tape.
JPMorgan trimmed to $340 from $345. Needham's Laura Martin maintained Hold without a target.
Two firms went the other way.
Rosenblatt's Barton Crockett raised his target to $300 from $276 while keeping Neutral.
Wells Fargo lifted its target to $350 from $310, while flagging that its 2027 and 2028 earnings estimates now sit about 9% below where the Street stood before the quarter.
BofA Securities' Wamsi Mohan did not move at all. He kept Buy and a $380 objective, the highest on the tape, and raised his fiscal 2026 earnings estimate to $8.85 from $8.63.
The below-consensus September guide, Mohan wrote, "reflects supply constraints (iPhone, Mac and iPad) not weaker demand."
Barclays at $245 and BofA at $380 are currently 55% above market prices.
