Apple Earnings Forecast Chills Market! Pre-Market Stock Plunges Over 7%, Market Cap Faces $361.6B Wipeout

Apple (AAPL-US) saw its pre-market stock price plummet over 7% on Friday (31st), following warnings that shortages in advanced chip production capacity will hinder growth prospects. Investors have shifted focus to supply bottlenecks and whether anticipated iPhone price increases will dampen consumer demand. If the decline holds, Apple's market capitalization could lose approximately $361.6 billion.

At the time of reporting, Apple's pre-market stock was down 7.76%, temporarily trading at $307.54 per share.

On Thursday, Apple stated that shortages in advanced chip manufacturing capacity are restricting supply for iPhones, Macs, and certain iPads. CEO Tim Cook emphasized that the weaker financial outlook stems not from weak demand, but from constrained product supply. As the AI boom drives up demand for advanced chips and memory, supply across the tech industry is tightening, pushing costs higher and prolonging supply chain bottlenecks.

Apple forecasts revenue growth of 9% to 11% for the current quarter, below Wall Street's expected ~12%. iPhone revenue is estimated to grow 15% to 19%, also falling short of analyst predictions. However, iPhone sales for Apple's fiscal third quarter rose 21.7% year-on-year to $54.25 billion, surpassing the market estimate of $53.86 billion and setting a record for the period, indicating strong end-user demand remains intact.

JPMorgan analyst Samik Chatterjee's team noted that Apple's strong demand is colliding with supply and cost challenges, but supply constraints are more likely to delay sales rather than eliminate demand. Related revenues are expected to materialize in the coming quarters.

The market widely anticipates Apple will raise iPhone prices later this year, and investors are watching whether such hikes will weaken demand. TD Cowen analysts believe that a new iPhone product cycle, AI-enhanced Siri features, and Apple's upgrade programs could allow the company to raise prices without causing a significant drop in demand.

Additionally, CEO Tim Cook will step down from his role in early September, succeeded by hardware engineering chief John Ternus, marking the end of an era for Cook, who led Apple to become one of the world's most valuable companies.