Why Apple Stock Dropped on Friday

Apple stock plunged 7.35% Friday despite reporting fourth-quarter earnings that topped Wall Street expectations, with profit climbing 29% and revenue rising 16% to $109 billion.

The sell-off came after management issued forward guidance of 9% to 11% revenue growth, missing the 12% consensus estimate. CEO Tim Cook warned that worsening component shortages will constrain sales of iPhones, Macs, and iPads in coming quarters. The supply crunch stems from surging demand for AI infrastructure driving up costs and availability of shared components, Cook said—characterizing the problem as demand-driven rather than a traditional supply chain breakdown.

The disconnect between strong current results and cautious outlook sent shares sharply lower as traders priced in margin pressure and potential revenue headwinds. The component shortage tied to AI buildouts represents a structural challenge, forcing Apple to compete for manufacturing capacity against hyperscalers and chipmakers ramping data center hardware.