Did Apple just signal a bottom in momentum-driven memory chip stocks?

Tim Cook's final gift as Apple (AAPL) CEO to the stock market may be a potentially tradable bottom in crashed-out memory chip stocks.

LPL Financial strategist Adam Turnquist noted investors could argue that Apple's comments on memory chip prices mean the chip stock sell-off is overdone.

"We're starting to see some technical evidence of a potential bottom here in some of these names that had some 50% plus drawdowns in a very short period after historic rallies," Turnquist said on Yahoo Finance's Opening Bid. "I think that's the context that's needed here — some of these names are up 100%-plus over a very short period of time."

Apple issued cautious revenue guidance for the current quarter late Thursday, largely because the company can't source enough memory chips to meet demand. It's a problem Cook expects to persist.

"On the pricing front, we reluctantly raised prices, I would say," Cook said. "We did it because we're in what I would characterize as a 100-year flood on the memory pricing, with exponential increases in memory prices."

The memory chip market is tightening as demand for high-bandwidth memory (HBM) and advanced dynamic random-access memory (DRAM) used in AI servers continues to outpace supply.Apple CEO Tim Cook attends an event showcasing new products during the 2022 Apple Worldwide Developers Conference on June 6, 2022. (Wu Xiaoling/Xinhua via Getty Images)·Xinhua News Agency via Getty Images

Companies such as SK Hynix (SKHY), Samsung Electronics (005930.KS), and Micron (MU) have largely sold out their premium AI memory capacity through much of 2026 as customers, including Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), and Meta (META), race to build AI infrastructure.

The shortage has pushed memory prices sharply higher and given suppliers greater pricing power after several years of weak industry conditions. Experts expect memory supply to remain constrained into 2027, creating a favorable backdrop for the industry's largest producers.

The dynamic pushed the stock prices of Sandisk, Micron, and other players in the chip space to record highs in late June. Since then, however, the pullbacks in the space have been enormous due to fears of Big Tech overspending on AI.

Sandisk and Micron are down 46% and 30%, respectively, over the past month, according to Yahoo Finance AlphaSpace data.

Apple's quarterly results suggest investors may have gotten too cautious too quickly, as the fundamental drivers of the industry remain largely intact.

"These types of corrections come with the territory," Turnquist explained. "As things get extremely overbought and crowded, you tend to revert back to support. And that's what I think … we're seeing play out here in that space."

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Brian Sozzi is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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