APPLE shares fell nearly 10 per cent yesterday after a disappointing forecast showed that the iPhone maker was struggling to secure enough components as the AI-driven data center boom strains global supply chains.
The drop, if sustained, would mark the stock’s worst day since the pandemic-driven selloff in March 2020. It would erase nearly $500bn from Apple’s market capitalisation and return the crown of the world’s most valuable company to AI chip giant Nvidia, days after reclaiming it.
Tim Cook, widely hailed as a supply-chain genius, called the shortages ‘very significant’ and said Apple had limited options to address them, speaking on his final earnings call as CEO before handing the reins to John Ternus in September and becoming executive chairman.
“If even at Apple’s scale they are saying they are out all supply chain flexibility, it’s really bad for everyone,” said Ben Bajarin, CEO of tech consultant Creative Strategies.
Big Tech has been scooping up advanced chip-making capacity and memory chips to power its AI data centres, sparking shortages and price increases that are expected to shrink both the personal computer and smartphone markets this year.
Apple had cushioned some of the blow from surging memory costs by drawing on stockpiled inventory, but Cook said that the buffer was fading and shortages of processors were keeping it from meeting strong demand for iPhones and Macs.
Its forecast on Thursday for revenue growth of between 9pc and 11pc in the current quarter fell short of Wall Street’s roughly 12pc estimate, and softer growth in its services business also overshadowed otherwise strong June-quarter results.
The services weakness worried investors as it came during a stretch of strong iPhone sales, which typically feed the business that takes a cut of App Store purchases and includes everything from Apple Music to Apple TV.
That slowdown could deepen if iPhone sales take a hit from a price increase that many analysts expect during the launch of the new lineup, which typically happens in September.
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