Future Intelligence: Memory costs knock Apple down 7%

A memory shortage this week moved from data centers into consumer electronics: Apple posted a record quarter with revenue of $109.4 billion, but a warning about memory costs sent the stock down 7%. Alphabet paid for AI infrastructure with its first negative free cash flow since its 2004 IPO, while AWS accelerated to 37% and Amazon raised this year's investments to $220 billion – the market is beginning to distinguish who is already cashing in on capex and who is just paying, which also hit semiconductors this week. And Musk, according to WSJ, had Tesla's China business unit prepared for a spin-off as a ticket to a merger with SpaceX.

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Memory shock: AI memory chips carved 7% off Apple's value in a day

The AI memory chip shortage is no longer just a data-center topic. Apple wrote off roughly 7% on Friday after warning that supplier constraints and memory costs would hit the September quarter. Yet the company posted a record June quarter: revenue of $109.4 billion (+16%) and earnings per share of $2.02.

The problem lies in the outlook. Apple expects revenue growth of 9% to 11% against consensus around 12.1% and a gross margin in the 48% to 49% band. Morningstar forecasts a further quarter-on-quarter decline in product margin of 250 basis points. Tim Cook described the jump in memory prices as a "once-in-a-century flood".