AI companies are sweeping up memory, and NAND prices have risen fivefold in a year. How will this show up in Apple's earnings tonight, and who benefits, memory makers or Apple?
2026-11-02
Same chip, opposite profit and loss
The memory price surge is a structure in which one side's cost becomes the other side's revenue. IDC estimates memory costs are up about 350% from last year, and Apple management called it a "100-year flood," expecting prices to keep rising beyond the September quarter (Pepperstone, 2026-10). Hyperscalers locked in supply first through long-term contracts with downside protection with Kioxia and others, leaving Apple to buy the remaining volume at higher prices.
| Category | Winners | Losers |
|---|---|---|
| Memory supply | SK Hynix, Samsung Electronics, Kioxia, Micron, SanDisk | None (they hold pricing power) |
| Large buyers | Hyperscalers that signed long-term contracts first (secured supply) | The same hyperscalers (deteriorating cash flow) |
| Device makers | Apple, with a high share of premium products (room to pass on costs) | Low- and mid-range smartphone and PC makers (hard to pass on costs) |
| Consumers | None | iPhone prices up 13% on average, higher PC and smartphone prices |
The key is the difference in ability to pass on costs. As a premium brand, Apple can pass some costs on to selling prices, while low- and mid-range Android and PC makers struggle to do so. Even among the "victims," Apple takes the smallest hit.
What to watch in Apple's earnings tonight
Apple guided fourth-quarter (September quarter) gross margin to 47-48%, which includes about 1 percentage point from tariff refunds. Consensus is about 47.6%, 2.5 percentage points below the 50.06% a year earlier (Pepperstone, 2026-10). Excluding tariff refunds, the underlying margin pressure is greater.
The number the market is watching more closely is not the September quarter but the December-quarter margin guidance. Apple has warned that its cheaply purchased inventory is running down, so if holiday-quarter margin guidance comes in below 47%, it would mean memory costs have begun to hit the P&L in earnest. Consensus is revenue of $113.3 billion and EPS of $1.99, and the options market is pricing a one-day move of about 3.47% after the report (ithinkdiff, Pepperstone, 2026-10).
Services are the buffer against margin declines. Services gross margin was 75.6% last quarter, far higher than hardware, and growth is expected at about 12%. If services growth falls below 10% while hardware margins also slip, Apple's position as "the control group that dodged AI costs" could be shaken.
What signals show about the diverging fortunes of the two stocks
Apple (AAPL) last five trading days
| Date | Close | 10-day MA | 50-day MA | 150-day MA | Entry allowed | Trailing stop room | From high |
|---|---|---|---|---|---|---|---|
| 10/26 | 343.91 | 343.60 | 330.23 | 305.91 | Yes | 27.78% | -2.22% |
| 10/27 | 347.10 | 344.18 | 331.06 | 306.55 | Yes | 28.68% | -1.32% |
| 10/28 | 343.83 | 344.27 | 331.73 | 307.16 | Yes | 27.75% | -2.25% |
| 10/29 | 348.91 | 344.96 | 332.37 | 307.80 | Yes | 29.20% | -0.80% |
| 10/30 | 344.63 | 345.08 | 333.04 | 308.44 | Yes | 27.98% | -2.02% |
Micron (MU) last five trading days
| Date | Close | 10-day MA | 50-day MA | 150-day MA | Entry allowed | Trailing stop room | From high |
|---|---|---|---|---|---|---|---|
| 10/26 | 903.70 | 902.96 | 981.24 | 845.75 | No | 2.03% | -27.97% |
| 10/27 | 928.76 | 900.54 | 979.58 | 849.31 | No | 4.03% | -25.97% |
| 10/28 | 983.23 | 907.45 | 980.43 | 853.32 | No | 8.37% | -21.63% |
| 10/29 | 934.27 | 907.75 | 980.38 | 857.18 | No | 4.47% | -25.53% |
| 10/30 | 884.74 | 908.34 | 978.59 | 860.70 | No | 0.52% | -29.48% |
There is an irony here. Apple, the victim of rising memory prices, is just -2% from its high and holding its uptrend, while Micron, the beneficiary, is -29% from its high with its trailing stop room down to 0.52%. This means the market is discounting memory makers' earnings as "temporary profits that will vanish if AI investment shrinks," while viewing Apple's cost burden as "a manageable cost that can be passed on through price increases."
What should investors do?
- Apple holders should watch December-quarter margin guidance. Holding at 47% or above supports staying with the current trend, while 46% or lower would signal memory costs are fully hitting results, which makes trimming worth considering
- For memory stocks, watch buyers' purse strings rather than prices. The reason Micron fell even as NAND prices rose is hyperscaler cash flow. Micron is nearly at its trailing stop, so sticking to stop-loss rules on existing positions comes before new entries
- Apple's results could be indirect evidence of memory strength. The more Apple says "costs will rise further," the more memory suppliers' pricing power is confirmed. Holding both stocks provides a partial natural hedge on the direction of memory prices
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