Apple forecasts slower growth as AI build-out strains tech supply chains

Apple projected weaker than expected revenue for the three months to September, reflecting pressure on tech supply chains from the AI infrastructure boom, as Tim Cook marked his last earnings report as chief executive.

Kevan Parekh, chief financial officer, told analysts Apple expects 9-11 per cent revenue growth in the three months to the end of September, undershooting Wall Street forecasts of 12 per cent.

The stock fell 7.5 per cent after-hours, as Cook warned investors: “We continue to expect high levels of demand, however, with less flexibility in [the] supply chain we expect the impact from the supply constraints to increase significantly.”

The disappointing forecast came after the hardware giant reported iPhones sales of $54.3bn, up nearly 22 per cent year on year and better than the $53.1bn Wall Street expected, despite a broad contraction in global smartphone sales caused by higher memory chip prices.

Revenue from China continued a rebound after declines in recent years because of competition from domestic rivals such as Huawei, rising 22 per cent from the year before to $18.8bn.

“We were able to achieve this great result despite supply constraints and sequential foreign exchange headwinds,” said Parekh.

Apple recently reclaimed its title as the world’s most valuable company, and briefly touched $5tn in market value, as the hardware giant’s relatively small investments in AI made it a haven for investors among Big Tech stocks that are otherwise heavily exposed to the AI trade.

But investors were watching Thursday’s results closely for signs of how Apple intends to weather an industry-wide memory chip shortage that it blamed for a rare 20 per cent price increase on MacBooks and iPads in June.

Hardware chief John Ternus, who will take over as chief executive in September, needs to convince investors he can manage the vast supply chain that Cook was instrumental in building at a time of acute pressure.

Apple is widely expected to raise iPhone prices later in…