Apple and Palantir Shares Drop Premarket as Memory Costs and AI Spending Weigh on Margins

Key points

• Apple shares dropped 4.4% and Palantir fell 6% in premarket trading after both companies released earnings after the bell on Monday.
• Apple reported fourth-quarter revenue of $114.48 billion and EPS of $2.10, beating estimates, but issued a margin forecast that disappointed investors due to rising memory costs.
• Palantir beat third-quarter estimates with U.S. commercial revenue exceeding government revenue for the first time, though its stock fell despite strong performance.
• Apple CEO John Ternus described memory pricing as 'unprecedented' due to the AI build-out, warning of supply constraints for Mac and iPad in the December quarter.
• Apple's fiscal 2026 revenue reached a record $479 billion, but the company faces profitability pressures from component shortages and foreign exchange headwinds.

Background

Apple's current earnings are the first under CEO John Ternus, who took over from Tim Cook in September 2026. The company recently reclaimed the title of the world's most valuable publicly traded company. Palantir had previously raised full-year guidance to $8.53 billion, driven by a 148% surge in commercial sales. The current memory chip shortage is part of a broader trend where AI infrastructure spending is straining supply chains for major tech firms.

How outlets are covering it

CNBC emphasizes the profitability concerns for Apple, noting that while revenue was strong, the margin forecast disappointed investors due to memory costs and the rollout of Siri AI. Leverage Shares analyst Violeta Todorova highlighted that Apple's 25% stock rise in 2026 leaves little room for disappointment. The New York Times focused on the AI boom's impact on component prices, noting that Apple's warning cast a shadow over an otherwise strong quarter. Yahoo Finance provided detailed breakdowns, noting that Apple's Greater China revenue missed estimates despite strong iPhone and Mac sales, and that the company increased purchase obligations by $33 billion to secure memory supply. Palantir's decline is attributed to high expectations despite beating estimates, with commercial revenue finally surpassing government revenue.

Why it matters

The memory chip shortage driven by AI demand is creating significant supply chain pressures for major tech companies, affecting profitability and product availability. Apple's margin pressure and supply constraints for Mac and iPad could impact future growth, while Palantir's shift toward commercial revenue signals a changing landscape in government vs. private sector AI adoption. These developments highlight the broader impact of AI infrastructure spending on traditional tech supply chains and market valuations.

What to watch

Apple expects higher memory costs in the December quarter, partially offset by product pricing and carry-in inventory. The company anticipates supply constraints for Mac and iPad in the December quarter. Palantir's commercial revenue growth may continue to drive its valuation, but high expectations could lead to volatility. Investors will watch how Apple manages memory costs and supply chain issues in the coming quarters, as well as how Palantir sustains its commercial revenue growth.