Apple price target rises at CNBC club despite memory price squeeze

Apple price target expectations got a lift from CNBC Investing Club after the iPhone maker beat quarterly sales and profit estimates, but investors still punished the stock over rising memory costs and softer guidance. Apple shares fell nearly 6% in after-hours trading after the report, according to CNBC, as the company warned that supply constraints are getting worse.

CNBC Investing Club said it raised its Apple price target to $340 from $300 while keeping a hold-equivalent 2 rating. The club said Jim Cramer’s Charitable Trust owns Apple shares.

For Apple’s fiscal third quarter of 2026, which ended June 27, revenue rose 16% from a year earlier to $109.42 billion. That topped the $108.65 billion expected by analysts surveyed by LSEG. Earnings per share, meaning profit divided by each share outstanding, increased 29% to $2.02, ahead of LSEG’s $1.89 estimate.

CNBC reported that tariff refunds added about 11 cents to earnings per share. Without that benefit, Apple still beat profit expectations by 2 cents.

Why are memory prices hurting Apple?

Memory chips are core parts used in devices such as iPhones, Macs and iPads, and higher memory prices raise the cost of building that hardware. Gross margin, the share of revenue left after product and service costs, gets squeezed when component costs rise unless a company offsets them with higher prices, cheaper parts elsewhere or inventory bought at lower prices.

Apple reported a companywide gross margin of 50.1%, better than expected and above the year-earlier level, according to CNBC. Management said the figure included about a 2 percentage point lift from tariff refunds. Excluding that benefit, CNBC said Apple’s product gross margin would be about 38.1%, compared with the 36.7% expected by Wall Street.

CEO Tim Cook described current memory pricing on the earnings call as a “100-year flood,” according to CNBC. He said Apple paid more for memory in the March quarter than in the December quarter, then paid more again in the June quarter. Cook also said market prices for memory are expected to keep rising beyond September.

Apple said September-quarter revenue should grow 9% to 11% from a year earlier, below the 12.1% growth analysts expected, according to FactSet. The company said foreign exchange would reduce growth by 2.5 percentage points and that supply constraints would increase significantly for iPhone, Mac and iPad.

At the midpoint, CNBC calculated Apple’s revenue outlook at about $112.7 billion, below the $114.84 billion consensus estimate from LSEG. Apple guided for September-quarter gross margin of 47% to 48%, compared with FactSet expectations of 47.4%, though CNBC noted that the outlook includes a 1 percentage point benefit from tariff refunds.

Apple’s product revenue rose 18.1% year over year to $78.7 billion, beating the $77.62 billion estimate cited by CNBC, helped by iPhone and Mac sales. Services revenue grew just over 12% from a year earlier but missed expectations, and CFO Kevan Parekh cited sequential foreign exchange pressure, according to CNBC. Services gross margin was 75.6%.

CNBC said Apple reached June-quarter records for earnings per share, operating cash flow, Services revenue, iPhone revenue and Mac revenue. IDC said iPhone set a June-quarter record in every geographic segment and among upgraders, helping Apple gain global market share, according to CNBC.

The stock had rallied into the report. CNBC said Apple shares recently reached records and briefly made the company the second U.S. business with a market value above $5 trillion.

CNBC Investing Club tied its higher target to 2027, when it expects broader availability of Apple Intelligence to make the iPhone more valuable to customers. Cook said Apple is working on the next generation of Apple Intelligence, including Siri AI and AI features across its platforms, according to CNBC.

Two upcoming events remain in focus. CNBC reported that Cook is set to move into an executive chairman role on Sept. 1, with John Ternus becoming CEO, and that Apple’s annual September iPhone event could show whether flagship iPhone prices follow the recent increases announced for MacBooks and iPads.

This story draws on original reporting from CNBC.