Citi Cuts Apple 2H26 Forecast on Memory Price Hikes

Citi Adjusts Apple's 2H26 Earnings Outlook

Citi has trimmed its earnings forecasts for Apple for the second half of 2026. The adjustment reflects anticipated pressure on the company's gross margins due to a significant increase in memory component prices.

Market Context: Rising Memory Costs

According to a note from Citi analyst Atif Malik, the surge in memory pricing is a key factor impacting profitability. While Apple is considered better positioned than most smartphone vendors to manage rising component costs, the price hikes are expected to create incremental margin pressure.

Impact on Apple's Profitability

The primary impact for Apple will be on its gross margin. The company's ability to absorb or pass on these higher costs to consumers will be closely watched by investors. This development highlights a broader supply chain challenge affecting the electronics industry.

Summary and Outlook

Investors will be monitoring Apple's upcoming financial reports for indications of how effectively it navigates these higher component costs. The company's future profitability may depend on its supply chain management and pricing strategies in response to this market shift.

FAQ

Q: Why did Citi cut Apple's earnings forecast?
A: Citi cut the forecast due to expected pressure on Apple's gross margins from surging memory component prices.

Q: Which period does the forecast cut apply to?
A: The revised forecast applies to the second half of 2026.

Source: Investing.com