Apple Inc.’s (NASDAQ:AAPL) record-breaking fiscal third quarter is being overshadowed by looming fourth-quarter supply shortages. The surprising culprit? The tech giant underestimated consumer demand for its own products, contributing to a weaker-than-expected September-quarter outlook and a sharp drop in after-hours trading.
‘A Demand Forecast Issue’
Despite posting its strongest June quarter ever, Apple expects its September-quarter revenue growth to decelerate to 9% to 11%. The company projects fourth-quarter sales between $111.69 billion and $113.74 billion, trailing Wall Street’s $114.84 billion estimate and sending AAPL shares down over 6% in overnight trading.
During his final earnings call, outgoing CEO Tim Cook candidly admitted that the impending constraints across the iPhone, Mac, and iPad product lines are largely self-inflicted.
“The root cause of it is not a regular supply issue. It’s a demand forecast issue, to be candid, where the iPhone and the Mac are both doing remarkably better than we thought they would do,” Cook explained.
Because of the limited flexibility in the semiconductor supply chain to secure advanced nodes, Cook issued a stark warning: “We’ve got a quarter that we’re going to be scrambling on the supply side, essentially.”
Record Q3 Driven by Strong Demand
The supply chain crunch stems directly from Apple’s massive third-quarter beat. The Cupertino-based company posted revenue of $109.42 billion—up 16% year-over-year—and earnings of $2.02 per share.
This unexpected surge was propelled by the new A19-powered iPhone 17 lineup and the latest Macs, which saw revenue jump 22% and 29%, respectively. Furthermore, management expects the rollout of the deeply integrated “Siri AI” to sustain this high consumer interest through the holiday season.
Transitioning Through the ‘Flood’
Beyond the demand-driven supply constraints, Apple also faces mounting macroeconomic hurdles. Chief Financial Officer Kevan Parekh cautioned that a 2.5% foreign exchange headwind and surging memory costs will squeeze margins. Cook characterized the exponential rise in memory prices as a “100-year flood.”
Navigating these compounding challenges will soon fall to incoming CEO John Ternus. Cook closed Thursday’s call by expressing confidence in his successor, describing the ongoing executive transition as completely “seamless.”
Cook’s last day as AAPL CEO is Sept. 1, after which he will transition into a new role as the Executive Chairman of Apple’s board of directors.
How Has AAPL Performed In 2026?
AAPL shares were up 22.65% year-to-date, up 15.23% over the last month, and higher by 59.50% over the year. It closed 1.41% lower at $333.43 per share on Thursday, and it was down 6.50% in overnight trading.
Benzinga’s Edge Stock Rankings indicate that AAPL maintains a strong price trend in the short and medium terms but a strong trend in the long term, with a good quality score.
Read Also: Apple Makes Its Biggest Bet Since The iPhone: Ternus As CEO
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
