Apple's Inventory Surges 154% as CEO Cites 'Unprecedented' Memory Costs
Apple reported a 154% year-over-year inventory jump to $14.54 billion, with CEO John Ternus citing unprecedented memory price hikes that lowered gross margin guidance to 45-46%.
U.S. technology company Apple disclosed in its latest fiscal fourth-quarter results that its inventory levels rose significantly, growing from $11.09 billion in Q3 to $14.54 billion in Q4, a 31.1% increase quarter-over-quarter. Compared to $5.72 billion in the same period of 2025, inventory surged 154.3% year-over-year, reflecting the company's stockpiling strategy amid tight component supplies.
Apple CEO John Ternus stated during the earnings call that the current situation with memory pricing is "unprecedented." He noted that while carrying inventory and lower costs on certain non-memory components partly offset higher memory costs seen since June, the company expects even higher memory costs in the December quarter. Consequently, Apple lowered its gross margin guidance for the next quarter to between 45% and 46%, down from 47.9% in the September quarter.
Ternus also revealed that Apple's manufacturing purchase obligations increased by $33 billion from June to the September quarter as the company works to improve supply. Chief Operating Officer Sabih Khan joined the discussion on memory issues, reiterating the increased purchase obligations and not ruling out future price increases on devices. Additionally, weak iPad sales were attributed to supply constraints, with revenue at $6.2 billion, below analyst expectations of $6.7 billion and down 10% year-over-year.