Phillip Capital downgraded Apple to reduce from neutral, warning that rising memory chip prices are becoming a major drag on margins even as iPhone and Mac demand holds up. The firm kept its $290 price target, a level that implies a drop from Monday's close. Apple had already fallen nearly 10% after issuing weak guidance tied to the global chip crunch.
Phillip Capital downgraded Apple to reduce from neutral on Monday, holding its price target at $290 — a level that implies a 4.4% decrease from Monday's close. Analyst Helena Wang said the call comes down to one pressure point: memory chips.
Demand for the iPhone 17 and MacBooks remains strong, Wang wrote, but the sharp rise in memory prices threatens to undercut that momentum. According to analyst Helena Wang, memory inflation is becoming a major margin headwind for Apple: "Memory inflation is becoming a major margin headwind."
Three suppliers control the DRAM market
Management expects memory prices to keep rising in 4Q26 and beyond, according to Wang. Apple has partially offset the impact through lower-cost carry-in inventory, a favourable product mix, and lower non-memory component costs — benefits Wang expects to diminish over time. As a result, she pointed to the DRAM market, which is effectively dominated by just three suppliers, leaving Apple with little sourcing flexibility.
Apple's post-earnings slide
Apple had already fallen nearly 10% after reporting earnings on Thursday, even though the company beat analyst estimates on both earnings and revenue. The drop came because Apple issued weak guidance for the current period due to the global chip crunch.
The company has already increased prices on its iPads and Mac models, and some analysts expect iPhones to face a price hike in the near future. Wang also noted that Apple Intelligence has not yet given consumers a clear reason to upgrade.
Regulatory risk clouds Apple Intelligence
Regulatory hurdles in Europe and China — which generate 44% of Apple's revenue — could continue to limit the near-term monetization of Apple Intelligence, Wang wrote. Still, Wall Street's broader view has not soured on the stock. According to LSEG, 32 analysts rate Apple a buy or strong buy, versus 13 at hold and three at underperform.
Source: CNBC
Trading involves risk.
Risk Disclaimer
