Memory Costs Are Hitting Apple. BofA Still Sees 28% Upside.
Product, Analyst Rating, Cost Pressures
Neutral
Apple is facing rising memory costs that are expected to pressure pricing on its higher-end iPhone models, according to a Bank of America analysis. The cost increases are significant enough that pricing assumptions for the Pro and Pro Max tiers have been revised upward, suggesting consumers may face higher prices on premium devices.
Despite the margin headwind from elevated memory costs, Bank of America maintains a bullish outlook on Apple shares, citing meaningful upside potential from current levels. The firm's analysis suggests the market has not fully priced in Apple's longer-term growth trajectory, even after accounting for the cost pressures.
Why it matters
Rising memory costs could compress Apple's hardware margins or dampen consumer demand if passed through as higher retail prices on its most profitable iPhone models. However, a major Wall Street firm's continued bullish stance provides a counterweight to near-term cost concerns.
Key facts
Memory cost increases are impacting Apple's iPhone Pro and Pro Max product lines • Cumulative pricing assumptions for Pro and Pro Max have been revised up by $200 • Bank of America maintains a bullish view with approximately 28% upside on Apple shares • Cost pressures appear significant enough to influence device pricing strategy