Apple Shares Fall on Margin Outlook
Apple's forecast of lower gross margins for the next quarter pushed its shares down in premarket trading after its fourth-quarter report.
Updated on Nov. 3, 2026 in Economic Indicators
Apple shares fell 4.5% to $323.48 in premarket trading on Tuesday after the company reported fourth-quarter revenue of $114.5 billion and earnings per share of $2.10. The stock had already declined nearly 2% on Monday.
Why it matters
Apple projected gross margins of 45% to 46% for the next quarter, below the 47% analysts had expected, reflecting prolonged high memory chip prices and costs tied to ramping up its Siri AI assistant. Investors are weighing whether the margin pressure will persist.
Apple's gross margin was 47.9% in the September quarter, while the company now targets 45% to 46% for the next quarter, below the 47% analysts projected. Services revenue hit an all-time high of $31.57 billion but grew 9.8%, down from 12.1%, and how long memory costs will keep margins under pressure remains unclear.
The players
Apple
Apple is the Cupertino, California-based technology company known for its iPhone, Mac and services businesses.
The details
Apple's gross margins were hit by a jump in memory chip prices, and the company's guidance reflects expected prolonged high memory costs. Wearables, home and accessories revenue came in lower than hoped, while services revenue grew 9.8% in the fourth quarter, down from 12.1%.
Timeline
Apple shares declined nearly 2% on Monday, November 2, 2026.
Apple shares fell 4.5% in premarket trading on Tuesday, November 3, 2026.
Apple projects services revenue growth of 8% to 9% in the current quarter.
Services slowdown could extend into the March quarter.
Economic Indicators Context
Rising memory chip prices have repeatedly squeezed hardware makers' margins during semiconductor cost upcycles. Apple's guidance suggests the current cycle is weighing on profitability even as its services business continues to expand.
Investors holding Apple stock face a share price that has dropped sharply on margin concerns, and retirement or brokerage portfolios with large tech weightings may see short-term volatility. Consumers are not directly affected by this earnings report.
The takeaway
Gross margin guidance often moves stock prices more than headline revenue, so investors should watch input cost trends such as memory chip prices. Watching whether services growth holds near 8% to 9% will help show whether the company's higher-margin business can offset hardware pressure.
What happens next
Apple's services revenue growth projections for the current quarter and the potential extension of the services slowdown into the March quarter will show whether margin and revenue pressures persist.
Further reading
For broader context on corporate earnings and macro trends, explore Economic Indicators.
