Apple's Margin Problem Is Micron's Pricing Power: Why Memory Stocks Are Bouncing Today

Key takeaways

• Apple’s warning about rising memory costs is good news for memory makers, boosting their shares as investors anticipate sustained premium pricing.
• Apple FY24 Q4 revenue $114.5 billion
• Apple FY24 Q4 gross margin 45‑46%
• Apple inventory $14.5 billion

What happened

Apple said its memory costs will keep rising after the holidays, pushing its gross margin down to 45‑46% in the December quarter, below analyst expectations. The announcement lifted memory makers—SanDisk, Micron, Seagate, Western Digital—whose shares rallied 3‑5% after a month of steep declines. Apple’s inventory grew to $14.5 billion, up $33 billion from the June quarter, indicating higher prices and tighter supply for Mac and iPad.

Why it matters

Apple’s forecast signals that memory prices are likely to stay elevated for several quarters, which benefits memory suppliers that can charge premium prices. The company’s higher inventory and tighter supply suggest that demand for high‑performance memory will remain strong, supporting the earnings outlook for these…

Short-term and longer-term

Short-term. Over the next few days, watch Apple’s earnings call for any updates on memory pricing or supply contracts.

Longer-term. For the coming months, the key question is whether Apple’s memory cost pressure will persist and how it will affect the company’s long‑term profitability.