Apple Price Hikes Sent AAPL Stock Falling. They May Not Even Matter in the Long Term.

Tech leader Apple (AAPL) has implemented sweeping price increases across its MacBook and iPad product lines. CEO Tim Cook has stated that these increases were unavoidable as memory and storage costs continue to rise. According to Counterpoint Research, these costs have quadrupled in the past three quarters, as suppliers seek these components for AI servers. Apple often raises average selling prices by dropping the cheapest option, starting at higher storage levels, or pushing buyers toward Pro models.

While the market reasonably did not react favorably to the news, Morgan Stanley analysts still believe that Apple is well-positioned to weather this storm. Analyst Erik Woodring believes that this move is implemented to protect the company’s enviable gross margins. Woodring believes that if Apple’s demand remains inelastic, as history would suggest, these hikes could be an upside for both revenue and earnings. Therefore, although the move has spooked investors, it might reward the company in the longer term.