Apple retreats in pre-market after warning about memory costs and pressure on margins
In his first report as CEO, John Ternus warned that memory costs will continue to rise beyond the quarter ending in December.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
Apple shares fell about 4% in premarket trading on Tuesday (November 3) after the company warned that rising memory costs were likely to hurt its gross margins. According to Reuters, published by InfoMoney, the movement reflects investors' concern about pressure that could last longer than expected. Investing.com reported the same fact, without additional data.
The warning came in John Ternus' first earnings report as Apple CEO, released on Monday (November 2). Ternus described the memory pricing scenario as unprecedented, an assessment that draws attention at a time of transition in the company's leadership.
According to the executive's statements, memory costs should continue to rise beyond the quarter ending in December. This means that the pressure is not expected to be resolved in the short term, and the administration has already treated the issue as an issue for the coming periods.
The sensitive point is the gross margin, an indicator that shows how much revenue remains after the production cost. By saying that the increase will harm this margin, the company put on the table a question of profitability, and not just sales volume.
Investors are also expressing concern about persistent uncertainties in the supply chain and rising expenses linked to artificial intelligence. The two factors add up: memory becomes more expensive precisely when the company needs to spend more on AI, which puts pressure on the bill with no sign of immediate relief.
For those who defend fiscal responsibility, predictability and a business environment in which profit is measured by efficiency, the case shows how the cost of inputs and global chains affects even the largest companies in the world.
What changes for the investor
The episode reminds us that the gross margin may gain weight when reading the share in the coming quarters, as management itself indicates that memory costs continue to rise. The drop in the pre-market shows that the market reacted to the warning, but the facts gathered do not provide a projection on the size of the impact or on the future performance of the shares. Monitoring upcoming reports and memory price developments helps separate a one-off effect from a lasting change.
Automatically translated from Portuguese.
