Apple shares drop as memory costs weigh on profit outlook

Apple shares fell approximately 2.8% in after-hours trading on Nov. 2, 2026, following the release of a fiscal fourth-quarter earnings report that included a cautious outlook for the upcoming quarter. The decline resulted in a loss of roughly $140 billion in market value as investors reacted to a disappointing gross margin forecast.

During his first earnings report since assuming the role of CEO on Sept. 1, 2026, John Ternus addressed the financial challenges facing the company. While Apple reported revenue of $114.5 billion and earnings per share of $2.10, representing year-over-year increases of 12% and 14% respectively, the company projected a gross margin of 45% to 46% for the December quarter, down from the 47.9% reported for the fourth quarter.

Ternus attributed the margin pressure to a global memory crisis, noting that the surge in demand for memory chips from the AI industry has constrained supply and driven up costs. He described the current memory constraints as a crisis and stated that the company expects these costs to rise further in the December quarter and beyond.

In addition to the supply chain pressures, the company noted that costs associated with the rollout of AI-powered Siri are impacting its margin forecast. To manage these expenses, Apple is currently drawing on previously purchased lower-cost inventory and working to secure future supplies.

The earnings call, which also featured CFO Kevan Parekh and COO Sabih Khan, highlighted that the company is navigating a period of unprecedented memory pricing. Ternus emphasized that the firm is actively managing these costs as it looks toward the next fiscal period.