Apple’s stock slides as it blames supply chain constraints for its weak guidance

Apple's stock fell nearly 6% in late trading following its third-quarter earnings report, as the tech giant struggled with supply chain constraints and issued weaker guidance for the current quarter. Despite reporting better-than-expected earnings and revenue, driven by a 22% surge in iPhone sales, Apple's stock trading was significantly impacted by the company's inability to secure adequate chip manufacturing capacity and navigate foreign currency headwinds.

CEO Tim Cook attributed the challenges to a "global memory crunch," describing it as a "hundred-year flood" and a scramble by companies to secure chip manufacturing capacity. This has led to significantly higher costs, forcing Apple to raise prices for its Mac computers and iPads. However, the company has been reluctant to raise iPhone prices, expecting to do so at some point this year.

Cook also highlighted the impact of currency exchange rates, estimating that unfavorable rates could negatively affect growth by up to 2.5% in the fourth quarter. The company expects iPhone sales to grow by the "mid-teens" on an annual basis, but revenue from iPhones is anticipated to be impacted by the discussed factors. Despite these challenges, Apple is preparing for the launch of a redesigned Siri powered by Google's Gemini AI technology and the release of new iPhone models in September, which are critical tests for the company amid concerns about falling behind rivals in AI capabilities.