Apple Stock Drops 10% Amid Supply Chain Woes

The drop, which would erase roughly $450 billion to $500 billion in market value, comes just days after Apple overtook Nvidia as the world's most valuable company. If the decline holds, it would be Apple's biggest single-day percentage fall since the COVID-19 market sell-off in March 2020.

Apple forecast September-quarter revenue growth of 9% to 11%, below analysts' expectations of about 12% growth. The company said supply chain disruptions could constrain sales as demand for electronic components outpaces availability, driven by soaring demand for AI data centers.

On his final earnings call as CEO, Tim Cook described the shortages as "very significant" and said Apple has limited options to fix them in the near term. The company underestimated demand for some products and is working to secure alternative suppliers for memory chips used in its in-house processors. Cook is set to hand over the CEO role to John Ternus in September and become executive chairman.

Apple reported June-quarter revenue of $109.42 billion, up 16% from a year earlier, with net income rising 26% to $29 billion. iPhone revenue increased 22% to a record $54.25 billion, and Mac revenue grew 25%. Apple had previously offset rising memory costs by drawing on stockpiled inventory, but those reserves are now running low.

Morgan Stanley analysts questioned Apple's supply chain leverage and noted that AI has not yet provided a measurable tailwind to products or services. Apple reaffirmed its AI strategy, with Cook calling on-device processing a "competitive weapon." The company also reiterated plans to invest more than $600 billion in U.S. manufacturing over the next four years.