Apple Guides Margin to 45%-46%; Shares Fall 4% Premarket
Apple guided its December-quarter gross margin to 45%-46%. The margin was 47.9% in the September quarter, and the market expected 46.3%. The stock is trading near $323 in premarket, down about 4%.
The cause is memory prices. CEO John Ternus called the memory price increases unprecedented and said costs will stay high beyond the December quarter. The cushion from inventory bought at lower prices is fading; Apple's purchase commitments rose about $33B in one quarter.
The quarter itself was strong: revenue rose 12% to $114.48B, against expectations of $113.4B. iPhone revenue climbed 17% to $57.58B. The market read this as a memory-cost story, not an iPhone story.
The impact did not stay with Apple; European stocks fell on Tuesday in a tech sell-off. The Nasdaq 100 had dropped 1.39% on Monday. Oracle's $20B stock and bond offering, with new shares priced at $116, revived worries over AI funding, and its shares fell 8.8% that day.
The second story is the Strait of Hormuz. The Wall Street Journal, citing US officials, reported that the US struck Iran's Qeshm Island in the strait. Officials described the strikes as defensive, aimed at stopping Iranian attacks on commercial ships.
