Apple Falls Nearly 9% as a Supply Warning Overshadows a Record Quarter

Apple stock fell nearly 9% in Friday afternoon trading, its steepest one-day slide in months, after the company paired a record June quarter with a cautious outlook. The results landed Thursday after the close. Investors spent Friday reading the guidance, not the beat.

Records on top, cracks beneath

For its fiscal third quarter, ended June 27, Apple posted revenue of $109.4 billion, up 16% from a year earlier, and diluted earnings of $2.02 a share, up 29%. Both set June-quarter records, and both topped Wall Street estimates. Gross margin came in at 50.1%, helped by about two percentage points from tariff refunds. iPhone revenue rose 22% to $54.25 billion, ahead of the $53.86 billion analysts had modeled. The top line was not the problem.

The soft spots sat below the headline. Services revenue reached $30.74 billion, short of the $31.22 billion analysts expected and the first real wobble in a segment the market treats as Apple’s growth engine. Sales in Greater China came to $18.8 billion, below projections of $19.6 billion. Then came the outlook. Management guided to September-quarter revenue growth of 9% to 11%, under the roughly 12% the Street had penciled in, with a 2.5-point currency headwind on top.

The bigger jolt was supply. Apple told analysts that constraints will increase significantly in the September quarter, crimping availability of iPhone, iPad, and Mac. Finance chief Kevan Parekh tied the pressure to a worldwide scarcity of memory chips and processors that has lifted component prices and stretched delivery times. A record quarter reported into that warning left the stock little room.

A stock priced for more

Apple came into the print sitting near the top of its range. The setup was rich. The stock closed Thursday at $333.43, up 13% over the prior 30 days and 32% across three months, within 2% of its highest close of the last 90 sessions. Volume that session ran close to one and a half times the 20-day average. A stock that had climbed that far on optimism had plenty to give back when the outlook came in soft. Even after Friday’s drop, the shares held well above their 52-week low of $201.50 and a short distance under the 52-week high of $344.57.

The reaction stood out on a heavy earnings day. Amazon, which reported its own quarter the same evening, climbed sharply in Friday’s session as investors sorted the winners from the laggards across big tech. Apple landed on the wrong side of that sort, at least for a day.

What to watch next

The next markers are concrete. Apple declared a dividend of 27 cents a share, payable Aug. 13 to holders of record on Aug. 10. The September quarter itself becomes the test: whether the supply squeeze runs as deep as management flagged, and whether services can reaccelerate after the miss. The memory shortage that Parekh described also reaches well beyond Apple, and its path will shape component costs for much of the hardware sector.

One caveat on the numbers here. Friday’s session was still open as this published, so the intraday drop is not the closing word; the final figure may settle above or below where the stock traded midday.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.