Apple Profit Hits $30.71 Billion as Chip Costs Rise

Apple reported $30.71 billion in earnings for the July-September period, a 12% increase from the same quarter last year. The revenue figure reached $114.5 billion, surpassing the $113.4 billion expected by analysts. Despite beating these forecasts, shares fell 2.75% in after-hours trading on Wall Street. The decline followed a warning that rising memory chip costs would pressure future profits.

John Ternus, who became chief executive in September, addressed investors on Monday. He described the jump in memory prices as unprecedented. Ternus stated that costs for the fourth quarter of 2026 are expected to exceed those of the previous three months. He noted that growing demand from artificial intelligence data centers has pushed up prices for months. The industry has dubbed this supply squeeze RAMageddon.

Apple has already adjusted prices to manage these expenses. Ternus said that increases for iPads and MacBooks in June, followed by higher iPhone prices in September, provided some offset against the mounting costs. His comments marked the start of his leadership with positive financial results.

Ben Barringer, head of technology research at Quilter Cheviot, described the results as OK, if on the disappointing side. He attributed the revenue growth mainly to iPhone sales and strong demand for the Mac Mini. Barringer noted that growth in China was robust, while iPads and wearables disappointed. Services revenue increased by 10%, which was below the group’s overall growth rate.

Barringer also pointed to early interest in the iPhone Duo, a product that has yet to reach full release. He said there were hopes it could support Apple’s next phase of product innovation, though he emphasized that it remained early days. The figures contrasted with disappointing quarterly results from technology companies including Alphabet, Amazon, and Intel.

Emarketer analyst Jacob Bourne said Apple’s record iPhone revenue and strong Chinese growth showed the resilience of its business. He added that Apple’s restrained approach to AI infrastructure spending had helped protect its cash flow. This strategy stands in contrast to the large investments by its peers. Partnerships with businesses such as Alphabet could strengthen Apple’s AI capabilities without exposing it to the same financial risks.

Apple’s earnings per share climbed from $1.85 to $2.10, including five cents from tariff refunds. The company’s performance offers a positive start to Ternus’s tenure as chief executive. The next scheduled update will reflect the cost pressures Ternus described for the coming quarter.