AAPL Stock Heads For Worst Single-Day Fall In Over A Year — Wall Street Warns Apple’s AI Supply Chain Headwinds Are Far From Over

• Morningstar said strong demand for the iPhone 17 and MacBook Neo is likely to be overshadowed by supply constraints and rising memory costs.
• The firm also expects memory inflation to continue squeezing profitability, forecasting another 250-basis-point sequential decline in product gross margin in Q4.
• While Apple has begun raising prices to offset higher component costs, Morningstar said those increases are unlikely to fully eliminate the pressure in the near term.

Shares of Apple Inc. (AAPL) are headed for their worst single-day decline in more than a year after the company’s fourth-quarter (Q4) revenue guidance disappointed Wall Street.

While Apple reported a strong third quarter (Q3), analysts at Morningstar said in a recent note that the company's outlook points to mounting pressure from AI-driven memory inflation, tight chip supply and foreign exchange headwinds that could weigh on margins and growth through fiscal 2027.

Apple shares were down more than 7% in Friday’s pre-market trade. AAPL was among the top trending tickers on Stocktwits at the time of writing.

Morningstar Says Near-Term Headwinds Overshadow Strong Demand

In a note following Apple's earnings, Morningstar said demand for the iPhone 17 and MacBook Neo remains robust, but warned that supply constraints and rising memory costs are likely to overshadow that strength over the next several quarters. The research firm expects tight global chip supply, driven by artificial intelligence demand, to create roughly a 3% growth headwind in the September quarter and fiscal 2027.

Morningstar also expects memory inflation to continue squeezing profitability, forecasting another 250-basis-point sequential decline in product gross margin in Q4 and modeling a 200-basis-point margin headwind in fiscal 2027.

While Apple has begun raising prices to offset higher component costs, Morningstar said those increases are unlikely to fully eliminate the pressure in the near term.

Analysts Flag AAPL’s Weak Guidance

According to TheFly, Barclays said Apple's Q3 results were mixed, with strength in Macs offset by weaker performance in China and Services, while iPhone results were largely in line with expectations.

The brokerage firm said Apple’s forecast for 9% to 11% revenue growth in Q4 came in below expectations and viewed management's explanation about supply constraints and foreign exchange headwinds as a negative for the stock.

Barclays lowered its price target on Apple shares to $245 from $253 and reiterated its ‘Underweight’ rating.

Goldman Sachs also trimmed its price target to $360 from $370, but maintained its ‘Buy’ rating.

While the firm said Apple's Q4 guidance disappointed on both revenue growth and gross margins, it expects investor sentiment to improve over the next two quarters as higher prices take hold and unit demand proves more resilient than feared.

AAPL’s Q3 At A Glance

Apple reported earnings per share (EPS) of $2.02 on revenue of $109.4 billion in Q3, while Wall Street expected an EPS of $1.89 on revenue of $108.96 billion, according to Fiscal.ai data.

The company also said that tariff refunds contributed about $0.11 to its EPS during the quarter. CEO Tim Cook said Apple is seeing less flexibility in its supply chain than usual, while adding that the impact of these constraints is expected to “increase significantly” in the near-term.

“We're seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it. For September, we expect to pay even higher memory costs,” he said during a post-earnings call with analysts.

What Retail Traders Think Of AAPL Stock

Retail sentiment on Stocktwits around Apple trended in the ‘neutral’ territory, with message volumes at ‘high’ levels at the time of writing.

AAPL stock is up 23% year-to-date and 60% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 17% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 20%.

Also See: Gene Munster Highlights AAPL Has An iPhone Headwind And A Price Hike Tailwind — Here’s What He Said About Siri AI

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