Tim Cook Warned of a "100-Year Flood" in Memory Chip Pricing on His Last Earnings Call. Should Apple Investors Be Worried About Margins?
Apple is facing a new chapter as Tim Cook steps down.
Overview
Tim Cook is finishing his last stint as CEO of Apple (NASDAQ: AAPL). John Ternus will be taking over on Sept. 1, and he'll be coming in at a challenging time for the iPhone maker. Although the company has been reporting outstanding performance, there are headwinds swirling.
Apple recently announced it will raise prices on iPhones and other devices due to skyrocketing memory costs, and while there's already been an impact, management expects costs to increase in the current quarter. Should investors be worried about Apple's margins as it absorbs the rising costs?
Details
The advent of data centers processing massive amounts of information for artificial intelligence (AI) has led to a huge demand for various types of memory products that are in short supply globally. As the law of supply and demand dictates, this has resulted in soaring memory costs, which is why memory companies Sandisk, Micron, and SK Hynix have been hot stocks.
Source
Originally published at www.fool.com.