Apple Warns of 'Once-in-a-Century' Memory Cost Surge as AI Data Centers Squeeze DRAM Supply

Apple beat Wall Street estimates for its fiscal third quarter — revenue of $109.4 billion, EPS of $2.02, iPhone sales up 22% year over year and record Mac sales, plus a $2.2 billion tariff refund — but its stock fell 7.35% on July 31, its worst drop since April 2025, after the company guided to revenue growth of just 9–11% against roughly 12% expected and a gross margin slip to 46.5% from 48.1%. Apple attributed the pressure to what it called a "once-in-a-century" rise in memory costs, The Next Web and market reports said.

When AI and Consumers Compete for Chips

Apple warned of significant supply constraints and said it had stockpiled $11.1 billion of inventory to hedge against component shortages. The warning broke a long-held market assumption that AI infrastructure and consumer electronics could grow in parallel: with AI data centers absorbing DRAM capacity, memory pricing is squeezing every other buyer, and semiconductor investors shifted from a broad rally to selective names.

"A once-in-a-century" rise in memory costs, Apple said of the DRAM market, as it flagged foreign-exchange headwinds and margin pressure ahead.

Ripple Effects

The result helped complete a volatile week for memory-linked stocks — Micron fell 5.9% and SanDisk 5.09% on July 31 — and validated the diverging fortunes of AI compute and traditional hardware: Micron remains up 222% year to date against Nvidia's 11%, and analysts expect memory supply to stay tight through 2027 as data center demand keeps growing.