Apple shares fall as chip shortages and weak guidance cloud record revenue
Apple reported record second-quarter earnings driven by strong hardware sales, but investor concerns over rising memory costs and supply constraints have overshadowed Tim Cook’s final results as chief executive.
Apple shares declined on Thursday after the company issued a weaker-than-expected revenue forecast, overshadowing a record-breaking June quarter. The technology giant projected revenue growth of 9 to 11 per cent for the current period, falling short of the 12 per cent anticipated by market analysts.
Despite the cautious outlook, the company delivered robust financial results for the April-to-June period. Earnings reached $29.79bn (€25.9bn), or $2.02 per share, marking a 27 per cent increase from $23.43bn (€20.4bn), or $1.57 per share, a year earlier. Total revenue grew 16 per cent to $109.42bn (€95.2bn) from $94.04bn (€81.8bn), comfortably exceeding the $109bn consensus estimate.
iPhone sales drove much of this performance, jumping 21.7 per cent to a quarterly record of $54.25bn (€47.2bn). Mac revenue also climbed by 28.7 per cent to $10.35bn (€9bn), reflecting resilient demand across the company’s core hardware lineup.
However, these gains are now threatened by severe supply chain headwinds. Shortages of advanced chipmaking capacity and surging memory-chip costs, partly driven by the broader artificial intelligence boom, are squeezing margins. Chief executive Tim Cook characterised the spike in memory prices as a “100-year flood” and warned that expenses would continue to rise in the coming months.
To mitigate these pressures, Apple raised prices on select Mac and iPad models last month. While iPhone prices have remained stable so far, analysts anticipate further increases later this year to protect profitability. This is especially critical as the company will no longer benefit from the tariff refunds that previously added $0.11 per share to its earnings.
This earnings report also marks a significant leadership transition for the company. "Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment," Cook said. It serves as his final financial update before stepping down after 15 years, with John Ternus set to take over as chief executive on 1 September.
For European investors and the broader market, Apple’s performance highlights a shifting dynamic in the technology sector. Unlike its Big Tech peers, the company continues to generate substantial cash flow without making massive capital expenditures on artificial intelligence infrastructure.
Thomas Monteiro, an analyst at Investing.com, noted that this financial discipline makes the company a rare bright spot. He observed that as markets worry about free cash flow trajectories elsewhere in the sector, Apple remains a “safe haven in the storm”, though rising component costs will test that resilience.
The upcoming September iPhone launch will be critical in determining whether new hardware and potential price adjustments can successfully "help cushion the hit" from these supply constraints. This strategic test comes just as Apple recently regained its position as the world's most valuable listed company from Nvidia.
