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Apple Warns of Chip Shortage, Shares Drop 7%

businessAug 2, 2026·287 words·3 min read

Apple warned on Thursday that supply problems will hurt its business in the current quarter. The news pushed its share price sharply lower, even though the company had just reported strong results. Chief executive Tim Cook told investors that Apple faces what he called a "100-year flood" in the price of memory chips, and that this is squeezing profit margins. The results themselves beat expectations: revenue rose 16 percent to $109.

Cook said the real problem is that Apple did not expect so many people to buy its new products. Sales of the iPhone grew 22 percent and sales of Mac computers grew 25 percent. Some Mac computers are already hard to find. Apple thinks the iPhone and iPad will be next.

Apple also told investors that sales will grow 9 to 11 percent in the next quarter. Experts had hoped for about 12 percent. Only days before, the value of the company passed $5 trillion for a short time. This was Cook's last report as head of Apple. John Ternus will take his job on 1 September.

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