Apple Stock Falls as Manufacturing Commitments Jump $33 Billion Amid Margin Pressure

Apple (NASDAQ: AAPL) shares fell 4.46% to $323.23 in premarket trading at 08:21 a.m. ET Tuesday, following an earnings call that disclosed a $33 billion increase in manufacturing purchase obligations and a weaker gross margin forecast for the holiday quarter.

The increase implies $90 billion in manufacturing commitments at the end of September, up nearly 58% from the $57 billion reported in Apple’s June-quarter SEC filing. However, the company had not yet disclosed the exact September figure in its annual report.

The margin warning followed stronger-than-expected fiscal fourth-quarter results. Apple reported revenue of $114.5 billion, up 12% year over year and above analysts’ expectations of approximately $113.4 billion. Diluted earnings reached $2.10 per share, compared with estimates of $1.99. The earnings figure included a $0.05-per-share benefit from tariff refunds.

Apple’s Manufacturing Commitments Near $90 Billion

CEO John Ternus disclosed the increase during Apple’s November 2 earnings call while discussing efforts to improve component availability.

Chief Operating Officer Sabih Khan said Apple expects memory-related supply constraints for Macs and iPads during the December quarter, with demand running ahead of its expectations.

Apple expects December-quarter revenue to grow 7% to 10% year over year, a forecast that accounts for continued supply constraints.

Apple’s June filing showed that $56.2 billion of its manufacturing purchase obligations were payable within 12 months. That payment schedule applied to the June balance, and the company has not yet provided an updated breakdown for September.

Manufacturing purchase obligations cover future purchases involving component suppliers and contract manufacturers. They do not represent debt or expenses already recorded in Apple’s financial statements.

Although the disclosure came during a discussion about memory-chip supplies, Apple did not specify how much of the additional commitments related to memory purchases.

Apple shares had already fallen for two consecutive regular trading sessions before Tuesday’s premarket decline, losing about 3% by Monday’s close at $338.32.

Separately, Apple Tokenized bStocks (AAPLB) was trading at $325.64, down 5.22% over the preceding 24 hours, according to CoinMarketCap. AAPLB is a tokenized instrument linked to Apple shares, and its 24-hour price change is separate from the Nasdaq-listed stock’s performance.

Rising Memory Costs Weigh on Apple’s Margin Outlook

Apple forecasts a gross margin of 45% to 46% for the December quarter, compared with 47.9% in September. The forecast fell short of analysts’ expectations of about 47%, adding to investor concerns about rising component costs.

The September figure included an approximately one-percentage-point benefit from tariff refunds. Excluding that benefit, the reported margin would have been about 46.9%, narrowing the comparison with the holiday-quarter forecast.

Chief Financial Officer Kevan Parekh said higher memory costs were expected to account for most of the sequential margin decline. The rollout of Apple’s Siri artificial intelligence features would also affect margins through cloud-service costs and the deferral of a portion of device revenue.

CEO John Ternus described current memory pricing as unprecedented and said the company expects prices to continue increasing beyond December.

Apple has raised prices on several Mac, iPad and iPhone models to help offset component costs. Lower-cost inventory carried into the quarter and savings on non-memory components have also provided some relief, although management expects the inventory benefit to diminish over time.

The company’s inventories rose to $14.54 billion in September from $11.09 billion in June, an increase of approximately 31%. Unlike future purchase commitments, inventories represent goods and components that Apple already holds.

Wall Street firms also revised their outlooks following the earnings report.

Goldman Sachs analyst Michael Ng lowered his Apple price target to $380 from $390 while maintaining a Buy rating. Ng cited stronger-than-expected iPhone and Mac demand but identified rising memory and AI costs as pressures on the company’s outlook.

Morgan Stanley analyst Erik Woodring reduced his target to $350 from $355 while maintaining an Overweight rating. The firm cited concerns about slowing Services growth and lowered its fiscal 2027 earnings-per-share estimate by $0.05 to $9.85. Morgan Stanley said the December-quarter margin guidance was about 100 basis points below its forecast largely because it had assumed roughly $1 billion in tariff refunds; excluding that assumption, the guidance was nearly in line with its expectations.