Apple shares opened sharply lower Friday, dropping more than 9% to $304 after the company's September-quarter revenue forecast fell short of Wall Street expectations. The sell-off came even though Apple beat estimates for both revenue and earnings in the June quarter, with iPhone sales surging 22% to $54.25 billion and Mac revenue jumping 29% to $10.35 billion.
Why the guidance spooked investors
Apple guided September-quarter revenue growth of 9% to 11%, below the roughly 12% analysts had been expecting. CFO Kevan Parekh, speaking on what was Tim Cook's final earnings call as CEO, pointed to three headwinds: supply constraints, currency pressures, and a memory cost squeeze driven by rising demand for DRAM and NAND chips used in AI systems. The memory cost issue is a direct result of the AI boom, which has pushed up prices for the flash and RAM chips Apple buys in bulk. That's eating into margins even as the company posts record revenue numbers.
Earnings per share for the June quarter came in at $2.02, above the $1.89 consensus, and total revenue of $109.42 billion beat the $108.65 billion estimate. But investors focused on the forward look, not the rearview mirror.
Services and China: the weak spots
Two key segments missed forecasts. Services revenue, a high-margin growth engine Apple has been leaning on, came in at $30.74 billion — below the $31.1 billion analysts expected. Greater China sales of $18.82 billion also fell short, a worrying sign for the company's second-largest market. The region has been under pressure from local competitors like Huawei and a broader economic slowdown.
Parekh said the company is working on long-term memory supply agreements to lock in better pricing, but those deals won't show up in the current quarter's results. That leaves the September quarter exposed to continued cost pressure.
A changing of the guard
This earnings call marked Tim Cook's last as CEO. John Ternus, currently Apple's hardware engineering chief, will take over on September 1. The transition comes at a delicate time: Apple briefly touched a $5 trillion valuation earlier this week before the sell-off erased roughly $450 billion in market cap. Ternus inherits a company with strong product momentum but a stock that's now testing key technical levels.
The daily Relative Strength Index sits near 62, just below the firmly bullish territory of 70. Trading volume has expanded in recent sessions, a sign that more participants are piling into the move. The immediate battleground is $280, a support level that could determine whether the stock stabilizes or slides further. On the upside, $315 is the first recovery target, followed by $333 — a former resistance level that could now act as resistance-turned-support. The all-time high is $344.57.
Two catalysts on the horizon
Investors are watching two developments that could shift the narrative. The first is those long-term memory supply agreements Parekh mentioned — if Apple can lock in favorable pricing, the margin pressure from AI-driven chip costs could ease. The second is the redesigned Siri launch this fall, which is expected to be a centerpiece of Apple's AI push. A successful rollout could reignite enthusiasm for the stock and help justify the premium valuation.
For now, the market is waiting to see whether the September quarter guidance was conservative or a genuine warning. Ternus will have his first chance to address investors directly at Apple's next earnings call in late October.
