Apple Slides 4% as Ternus Calls Memory Pricing “Unprecedented” Despite a Record $114.5 Billion Quarter Rexielyn Diaz Wed, November 11, 2026 at 9:50 AM EST 4 min read AAPL +1.47% MU +12.43% GOOGM +1.10% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Apple fell about 4% after guiding December quarter gross margin to 45% to 46%, below the 46.3% analysts expected.
CEO John Ternus called memory pricing "unprecedented," while Micron Technology posted an 86.8% gross margin on surging chip prices.
Revenue rose 12% to a September quarter record of $114.5 billion, and Alphabet's Gemini models power the Siri AI ramp that adds costs.
The December quarter report, expected in late January, will show whether margins held and how fast iPhone Duo supply catches up.
Apple's first earnings report under CEO John Ternus set records almost everywhere. The stock still slid.
Apple (AAPL:NASDAQ) fell about 4% on November 3 after guiding December quarter gross margin to 45% to 46%. Analysts had expected 46.3%, and memory chips are the main reason for the gap.
The irony is hard to miss. Micron Technology (MU:NASDAQ) just posted an 86.8% GAAP gross margin as quarterly revenue jumped 379% year over year. Phone and PC makers like Apple sit on the other side of that trade.
Then there is Siri. Alphabet (GOOGL:NASDAQ) supplies the Gemini models behind Apple's revamped assistant, and Apple says the Siri AI ramp adds costs this quarter too.
Revenue rose 12% to $114.5 billion in the September quarter, while diluted EPS climbed 14% to $2.10. Both were September quarter records, and Services hit an all-time high of $31.6 billion.
Tariff refunds added about 1 point to the 47.9% gross margin.
Manufacturing purchase obligations rose $33 billion to $89.7 billion as Apple locked in supply.
Strip out the refunds, and the trend looks less flattering…
Underlying margin was closer to 47%, so the December range sits one to two points below it.
"What we're seeing with memory pricing right now is unprecedented," Ternus said on his first call as CEO. He also expects memory prices to keep climbing past December.
The top line gives Apple room to absorb some of this. iPhone revenue rose 17.5% to $57.6 billion, and the iPhone Duo only launched after the quarter closed.
Mac revenue grew 23.7% to $10.8 billion. Greater China rose 21% to $17.5 billion.
iPhone brought in $254.1 billion of fiscal 2026's $478.8 billion in revenue, up 21.2% for the year. That concentration helps now, yet it ties margins more tightly to memory content per phone.
Supply remains the bottleneck. Some online iPhone Duo orders were quoted delivery at the end of January, Bloomberg reported. Even so, Apple guided December quarter revenue up 7% to 10% and expects its best quarter ever.
Services deserves a closer look. Apple guided growth of 8% to 9% there, below the 9.8% it just posted.
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The margin hit lands on a stock priced for safety. Apple's restraint on AI spending made it a refuge, and shares had gained more than a fifth this year before the report, Reuters noted.
That restraint shows in the cash flow. Capex fell to $9.0 billion in fiscal 2026 from $12.7 billion, while free cash flow rose 37.8% to $136.1 billion. Micron, by contrast, spent $27.4 billion on capex in its fiscal 2026, triple Apple's outlay.
Apple's forward multiple sits far above Alphabet's, and that premium assumes steady profit growth. Yet this guide implies gross profit grows slower than revenue.
Price hikes are the obvious lever, but they carry risk. Ternus's comments imply "Apple products are going to become even more expensive," said Dan Coatsworth of AJ Bell.
My take: Apple's demand story looks as strong as it has in years, and record holiday revenue seems likely. Still, a premium multiple needs earnings growth, and memory is quietly taxing it. I would wait for proof that pricing can offset costs before paying this much.
The December quarter report, expected in late January, is the next test. It will show whether gross margin held inside the 45% to 46% range and how fast iPhone Duo supply is catching up.
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