New York, January 31, 2026, 07:11 EST — The market has closed.
Apple shares closed Friday 0.3% higher at $259.48. The iPhone maker warned that increasing memory-chip costs are beginning to squeeze profits, despite projecting stronger-than-anticipated growth for the March quarter.
U.S. markets are closed for the weekend, leaving Monday as the next checkpoint: will investors continue backing the strong demand narrative, or pull back over concerns about supply and costs?
This setup is crucial since Apple has heavily influenced index swings, and this week’s market action has been volatile. Traders are caught toggling between earnings reports and macroeconomic shocks.
Apple’s message came with mixed signals. Demand remained robust, yet supply chain issues persisted, prompting management to focus heavily on costs and component shortages.
Apple forecasted fiscal second-quarter revenue growth between 13% and 16% on Thursday, with gross margins expected to land in the 48% to 49% range. CEO Tim Cook informed analysts the company is grappling with processor supply shortages, admitting, “We’re currently constrained,” and noted it remains “difficult to predict when supply and demand will balance.” Reuters
The company reported fiscal first-quarter revenue of $143.8 billion, with earnings per share hitting $2.84. Reuters noted iPhone revenue climbed to $85.27 billion, and sales in Greater China surged 38% to $25.53 billion. However, an eMarketer analyst cautioned that the ongoing chip shortage “will pressure hardware margins” in upcoming quarters. Reuters
Apple reported its installed base topped 2.5 billion active devices, with operating cash flow nearing $54 billion. The company returned close to $32 billion to shareholders. It also announced a $0.26 per share dividend, payable Feb. 12, to those on record as of Feb. 9.
The supply crunch isn’t limited to Apple. Samsung Electronics and SK Hynix, who dominate roughly two-thirds of the DRAM market, cautioned that PC and smartphone manufacturers will face tighter shortages. This comes as memory production pivots toward the more profitable chips for AI servers.
Apple is focusing on producing and shipping its top three iPhone models for 2026, pushing back the launch of the standard version, Nikkei Asia reported. Reuters has yet to confirm the report, and Apple did not respond to requests for comment outside regular hours.
The risk is clear: if the component shortage persists, Apple might end up shipping fewer devices than expected or face slimmer margins by absorbing higher memory expenses. Either scenario would undermine the straightforward “upgrade-cycle” story.
In the coming week, investors will focus on initial analyst responses, further updates on supply-chain checks, and whether Apple tightens its margin outlook as memory prices work their way through the market.
Apple has locked in its annual shareholders meeting for Feb. 24, setting the stage for potential updates on strategy and capital returns.
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