Apple Stock Plunges 9.3% as Supply Shortages Weaken Forecast

This article first appeared on GuruFocus.

Apple (NASDAQ:AAPL), a consumer-technology company producing iPhones, Mac computers and digital services, plunged approximately 9.3% in Friday's regular-session trading as of 10:19 a.m. ET after supply constraints weakened its quarterly revenue forecast. Apple expects revenue to increase between 9% and 11% during the current quarter, below Wall Street's approximately 12% expectation. The decline placed the shares on course for their worst session since March 2020 and could erase roughly $500 billion in market value if sustained.

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Chief Executive Tim Cook described the component shortages as significant and said Apple had limited options for avoiding their effects. Demand from AI data centers has intensified competition for chips and memory, while inventory buffers that previously protected Apple are diminishing. Processor shortages are restricting the company's ability to meet demand for iPhones and Mac computers. Investors also reacted to slower growth across Apple's services business, which has historically provided recurring revenue alongside hardware sales.

The midpoint of Apple's revenue-growth forecast is 10%, approximately two percentage points below the 12% market expectation. At least four brokerages reduced their price targets following the report, although three raised their targets and the median objective remained approximately $330. Cook's final earnings call as chief executive also preceded John Ternus's scheduled takeover in September, with Cook expected to become executive chairman. Investors may focus on component availability, possible pricing changes for the next iPhone lineup and whether Apple's services operation can offset constrained hardware shipments during the leadership transition.

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