Apple’s stockpiling, especially computer memory, continued in the fiscal fourth quarter, according to Monday’s earnings. The company reported that its inventory increased significantly in the quarter, from $11.09 billion in the third quarter to $14.54 billion in the fourth quarter, a jump of 31.1%. On a year-over-year basis, inventory rose 154.3% from $5.72 billion in Q4 2025.
Apple’s forecast of a 45% to 46% gross margin in the December quarter was largely attributed to the impact of higher memory costs. Company reported gross margin of 47.9% for the September quarter.
“What we’re seeing now with memory prices is unprecedented,” Apple CEO John Ternus said on a call with analysts. “As we previously reported in the September quarter, we experienced higher memory costs compared to the June quarter, which were partially offset by inventory holding benefits and lower costs for some non-memory components.”
He said the company expected “even higher memory costs” in the December quarter, partially offset by price increases made earlier this year on some devices, including Macs and iPads in late June and iPhones in September.
Ternus also said that after December, Apple expects memory costs to “continue to rise.”
“As we’ve said before, we believe we’ll see a diminishing benefit from carryover memory inventory over time,” he said, noting that the company is increasing purchases of the key component. “As we work to improve supply, our manufacturing purchase commitments increased by $33 billion from the June to September quarter, which you will see in our annual report when it comes out tomorrow.”
Apple also brought in Chief Operating Officer Sabih Khan, who oversees the company’s supply chain and manufacturing, on a call to address memory issues. He reiterated increased purchasing obligations but did not rule out future price increases for Apple devices.
The company also blamed supply constraints for weak iPad sales in the quarter. The iPad was one of the few product segments that did not grow, even as iPhone and Mac sales beat estimates. iPad revenue was $6.2 billion, below analysts’ expectations of $6.7 billion. This figure was also 10% lower than the previous year.
We may earn a small commission when you make a purchase through links in our articles. This does not affect our editorial independence.
