Apple Inc. (NASDAQ:AAPL) experienced a sharp decline in its stock price on Thursday, shedding $263 billion in market capitalization as investors reacted to the company's decision to raise prices on its Mac and iPad product lines. The sell-off, which saw shares fall 6.12% to close at $275.15, was driven by escalating memory costs that have pressured the technology giant's margins.
The magnitude of the market value loss was staggering, equating to roughly 17 times the combined $15.3 billion in net sales generated by Apple's Mac and iPad units during the March quarter. This disparity underscores that the primary concern among investors is not just the immediate impact on those product lines, but the potential ripple effects on the iPhone, which remains Apple's flagship revenue driver.
Apple raised prices across its MacBook lineup, with the MacBook Neo starting at $699, up from $599. The MacBook Air with 512GB storage now costs $1,299, a $200 increase from its previous $1,099 price point. The 1TB MacBook Pro also saw a hike, moving to $1,999 from $1,699. The iPad Air was similarly affected, rising to $749 from $599. Notably, the iPhone was not included in this round of price adjustments, but analysts warn that it may not remain insulated for long.
The root cause of these price increases is the surge in memory chip costs. Conventional DRAM contract prices skyrocketed 93%-98% in the first quarter, and TrendForce projects an additional 58%-63% increase in the second quarter. Apple CEO Tim Cook had previously warned analysts to expect “significantly higher memory costs,” a forecast that is now materializing. “Apple’s memory costs are still high and likely to stay that way,” noted Ben Bajarin, CEO of Creative Strategies. IDC’s Nabila Popal added, “The iPhone isn’t spared, its hike is coming.”
The memory cost pressure is not isolated to Apple. Micron Technology Inc. (NASDAQ:MU) reported a blockbuster fiscal third quarter, with revenue surging to $41.46 billion from $9.30 billion a year ago, and non-GAAP gross margins reaching 84.9%. CEO Sanjay Mehrotra attributed the results to the “strategic value of memory in the AI era,” as demand for high-capacity memory for AI servers remains robust. Micron also revealed that Nvidia Corp. (NASDAQ:NVDA) and other customers have agreed to $22 billion in supply deals to secure memory, providing greater visibility into future demand.
Despite the positive outlook for memory suppliers, the broader market reacted with caution. The Nasdaq composite fell 0.5% on Thursday, while the S&P 500 edged down less than 0.1%. The Dow Jones Industrial Average managed a modest 0.1% gain. For the week, the Nasdaq was down 4.4% through Thursday, reflecting growing unease about the sustainability of AI-driven spending.
Mark Ellis, Chief Investment Officer at Nutshell Asset Management, highlighted the tension in the market. “There’s worry about the spenders, the hyperscalers, and whether AI spending delivers a return on capital,” he told Reuters. This sentiment has put pressure on some of the same trades that boosted Micron after its earnings report.
Despite the steep sell-off, some analysts remain bullish on Apple. Wedbush maintained its outperform rating and $400 price target, arguing that higher memory prices had “forced Apple’s hand.” Gene Munster of Deepwater Asset Management described the stock drop as “an overreaction,” citing Apple’s strong user ecosystem and pricing power. Apple is scheduled to report its next earnings on July 30, with analysts expecting Q3 earnings of $1.89 per share and full-year 2026 earnings of $8.76.
