Apple faces a margin squeeze as memory costs surge and supply constraints limit production, threatening to compress the stock's premium valuation as growth slows to a guided 9-11% for the September quarter.
Apple guided September quarter revenue growth and gross margin lower as memory costs surge and advanced-node shortages limit volume, threatening a near-record valuation multiple.
Apple shares face short-term headwinds as management forecasts a decline in September quarter revenue growth and gross margins. Surging memory costs and persistent supply chain bottlenecks for advanced-node chips are limiting production volume, challenging the company's near-record valuation multiple of 37.7 times trailing earnings.
The decline is primarily driven by a significant increase in memory costs, which management describes as a 'hundred-year flood,' alongside limited supply of advanced-node chips.