Apple Stock Dips Nearly 10% on Supply Concerns, Weakened Outlook

Apple shares plummeted by nearly 10% on Friday, marking the company's most significant one-day selloff since March 2020. The decline followed a warning from CEO Tim Cook that supply constraints and slowing growth would impact the company's results in the current quarter, overshadowing an otherwise strong earnings report.

The stock fell as much as 9.7%, reaching approximately $301 per share and erasing roughly $475 billion in market value. Cook attributed the profit margin squeeze to a "100-year flood" in memory pricing, indicating that Apple had underestimated demand for its iPhone and Mac lineups. Investors also reacted negatively to Apple's guidance for the September quarter, which forecasts revenue growth of 9% to 11%, falling short of Wall Street's expectations of around 12%.

These projections contrasted with the fiscal third-quarter results, which had exceeded analysts' estimates. Apple reported revenue of $109.4 billion and earnings per share of $2.02. While June-quarter iPhone sales reached a record $54.25 billion, weaker performance in iPad and services revenue contributed to concerns about cooling growth.

Cook, on his final earnings call before handing over CEO responsibilities to John Ternus on September 1, detailed the company's struggle with an unprecedented surge in memory chip pricing that has affected margins. He also noted that product shortages were primarily due to stronger-than-anticipated demand rather than widespread supply chain disruptions.

The sharp selloff represents a significant reversal for Apple, whose shares had reached a record high earlier in the week, briefly pushing the company's market valuation above $5 trillion. Attention will now turn to the company's ability to alleviate supply constraints and rekindle growth under Ternus's leadership.