Apple CEO warns of memory crunch. ‘We’ll look at a range of options’

The global memory crisis played an outsized role in tech earnings season, which hit an apex this week. Apple CEO Tim Cook warned it’s just the beginning.

“We believe memory costs will drive an increasing impact on our business,” Cook said in the Q&A portion of his company’s earnings call on Thursday after repeatedly telling analysts that the company faced “supply constraints” in the latest quarter. “We’ll continue to evaluate this.”

Apple’s earnings report, which included an almost across-the-board beat and better-than-expected revenue guidance, came a day after Meta and Microsoft said in their results that higher memory prices contributed to their elevated forecasts for capital expenditures for the year.

In projecting $190 billion in capex for 2026, up 61% from last year, Microsoft CFO Amy Hood said on a conference call that she anticipates a $25 billion impact from higher component prices. Meta noted that “expectations for higher component pricing” contributed to its capex forecast increasing from a high of $135 billion to as much as $145 billion.

Across the tech landscape, executives have been voicing their concerns about soaring prices for memory, which faces a worldwide crunch due to insatiable demand for artificial intelligence infrastructure. Each generation of Nvidia chip, the processor at the heart of the AI boom, packs in more memory, further constricting an already stressed market.

Memory maker Micron, whose stock is up roughly 570% in the past year, has been working to add capacity, as have competitors Samsung and SK Hynix. With AI chips and data centers sucking up so much supply, memory for consumer devices like PCs and smartphones is increasingly scarce, and thus much more expensive.

That’s why it was such a big topic on Apple’s call.

Cook said Apple’s revenue growth of 17% for the fiscal second quarter exceeded its guidance “despite supply constraints.”

He said the impact in the December quarter was “minimal” and that there was a bit more of a hit in the March period. For the quarter that ends in June, Cook said the big impact will be on several Mac models “given the continued high levels of demand that we’re seeing.”

Analysts wanted to know what Apple was going to do in response, but they didn’t get much by way of specifics. Cook said on a couple occasions, “We”ll look at a range of options.”

Since January, when AI memory began selling out, Wall Street has been asking consumer electronics companies like Apple and Dell how they will handle the memory shortage, and if they might be forced to raise prices or cut margins.

“Apple showed that even the best operators can’t fully escape the memory squeeze,” said Jake Behan, head of capital markets at Direxion. “Tim Cook’s warning of ‘significantly higher’ costs in the coming quarters tells you how real the AI-driven supply…