Apple has just delivered the best June quarter in its history, and the market thanked it by heading for the exits. For the three months to the end of June, the company reported revenue of $109.4 billion, up 16% on a year earlier, and profit per share of $2.02, up 29%. iPhone sales jumped 22% to $54.25 billion and Mac sales rose 29% to $10.35 billion. Chief executive Tim Cook called it Apple's “strongest June quarter ever,” with double-digit growth across iPhone, Mac and Services and in every region.
Then the shares fell almost 10% the next day.
Why a record set off a sell-off
The worry wasn't what Apple sold; it was what it might struggle to make. On the earnings call, finance chief Kevan Parekh warned that supply constraints would “increase significantly” in the current quarter, hitting the iPhone, Mac and iPad, while Cook said Apple expects to “pay even higher memory costs” in the months ahead. The culprit is the artificial-intelligence boom: data-centre operators are hoovering up the same memory chips Apple needs, straining supply worldwide. Apple had already raised prices on Macs and iPads in June as it wrestled with a shortage of RAM — the working memory inside every device — expected to last until 2027 and beyond. Cook, widely regarded as a supply-chain master, called the shortages “very significant” and admitted the company had limited options to fix them.
Investors also balked at the outlook. Apple guided to revenue growth of 9% to 11% for the current quarter, short of the roughly 12% Wall Street had penciled in, and softer growth in its Services arm added to the unease. The drop, if it held, would be Apple's worst day since the pandemic sell-off of March 2020, erasing close to $500 billion in value and briefly handing the “world's most valuable company” crown back to chip giant Nvidia. Brokerages split on what to do next: at least four trimmed their price targets while three lifted them.
A farewell with a sting
There was a personal footnote. These were Cook's final results as CEO before he steps down on 1 September, handing over to hardware chief John Ternus and becoming executive chairman. A record quarter should have been a victory lap; instead, the man hailed for building the world's most admired supply chain bows out warning that, this time, the chips may not fall his way.
