Micron's stock falls after Apple's Tim Cook expresses a desire for more memory suppliers

By Britney Nguyen

Apple and Amazon are both being hurt by higher memory prices

Apple said it expects memory-chip prices to continue their rise in the coming quarters.

Apple investors are feeling the pain of high memory prices - but the company's commentary wasn't enough to further the rebound in memory stocks.

Shares of Micron Technology (MU) were down 6.2% on Friday morning, while Sandisk's shares fell 5.2%. SK Hynix's American depositary receipts (SKHY) were off 2.2%.

One issue could be that Apple (AAPL) CEO Tim Cook lamented the state of the memory market on the company's Thursday earnings call. He noted the market for dynamic random-access memory has just three major suppliers, adding, "If there were more suppliers, that would be good, and it would help us on the supply side and perhaps the pricing side."

Cook said that the company had anticipated paying "significantly more" in the quarter for memory than in previous quarters, "and that is what happened." In the current quarter, he expects Apple will "pay even higher memory costs," though some relief will come from carry-in inventory and lower costs for non-memory components.

"If you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business," Cook said on the call with analysts.

The memory-chip shortage and subsequent surge in prices have also weighed heavily on the consumer-electronics market. Richard Windsor, founder of research firm Radio Free Mobile, said Apple's "iPhone launch quarter will not be as good as usual" given the weakness in that market.

Despite Apple being forced to raise prices for its products, Windsor said the impact on demand will likely be "less than anyone else given the strength of the Apple brand."

And though Apple is still in the development stage in its artificial-intelligence strategy, Windsor said that could help the stock look like "a hedge against AI volatility." However, Apple is more expensive than some software names that are trading at a discount, he said.

Meanwhile, Amazon.com (AMZN) raised its capital-expenditure estimates for the year from $200 billion to $220 billion, also citing higher memory costs.

-Britney Nguyen

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