In a segment on CNBC’s The Exchange, T. Rowe Price portfolio manager Tony Wang (who oversees the firm’s science and technology equity strategy) argues that Apple’s latest results demonstrate ongoing consumer demand resilience, even as the company faces rising costs tied to the AI boom.
Wang joined the program to discuss the investment case for Apple (AAPL) shortly after the company reported its fiscal fourth-quarter results—the first under new CEO John Ternus. Apple posted September-quarter revenue of about $114.5 billion, up 12% year over year and ahead of estimates, powered by strong iPhone sales (roughly $57.6 billion, up in the mid-to-high teens) and a 24% jump in Mac revenue. The period capped Apple’s best fiscal year ever, with annual revenue near $479 billion.
Despite the beat, shares came under pressure after Apple guided for December-quarter (holiday) gross margins of 45–46%, below analyst expectations. Management attributed the outlook primarily to higher memory costs—described by Ternus as “unprecedented” amid AI-driven demand for DRAM and NAND—along with some expenses related to ramping Siri AI features. The company also flagged ongoing supply constraints for products including the new foldable iPhone Duo.
Wang’s comments, reflected in the segment title, framed the results as evidence that consumer demand is holding up. This aligns with Apple’s ability to deliver record quarterly and annual figures, strong early interest in the iPhone 18 Pro lineup and Duo, and continued growth in its large installed base and services business, even after price increases and in a broader environment of component shortages affecting the smartphone and PC markets.
For investors, the takeaway from Wang’s appearance centers on the trade in Apple: top-line demand strength and the company’s ecosystem advantages provide a buffer, while the AI-related cost pressures (memory inflation and related AI investments) represent a nearer-term margin headwind rather than a fundamental demand problem. Apple has historically managed supply-chain challenges and can pass through some costs or offset them via product mix, services growth, and its balance-sheet strength.
MacDailyNews Take: Apple continues to prove that Apple’s demand is solid. The debate now centers on how long elevated memory costs persist and how effectively Apple can offset them through mix, pricing, and services growth while still delivering the product cycles that both users and investors expect.
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
Like 🙂 or dislike 🙁 this post below!
