Apple (AAPL) Stock — Why Analysts Still Like It Despite a Memory Squeeze

TLDR

• Citi reiterated a Buy rating on Apple with a $315 price target, despite trimming 2026 and 2027 EPS estimates by $0.06 and $0.04 respectively.
• DRAM prices are forecast to rise 50% in Q2 2026 and 100% in H2 2026, putting pressure on smartphone makers across the board.
• Memory accounts for roughly 9% of iPhone costs and 15% of iPad and Mac costs.
• Citi estimates a 140 basis-point gross margin headwind for Apple in 2026, easing to 48 basis points in 2027.
• Apple launched the iPhone 17e at $599 and MacBook Neo at $599 last week, signaling it can manage cost pressures better than rivals.

Memory prices are spiking, and the smartphone market is feeling it. Citi analyst Atif Malik published a note Sunday warning that DRAM costs are set to surge — 50% in Q2 2026 and 100% in the second half of the year. That’s bad news for most hardware makers. For Apple, it’s a bit more complicated.

Apple Inc., AAPL

Citi trimmed its fiscal 2026 EPS estimate for Apple by $0.06 and its 2027 estimate by $0.04. The revisions reflect the expected margin hit from rising component costs. But the bank kept its Buy rating and $315 price target intact.

Apple stock was trading down around 0.7% at $255.81 Monday morning. The stock is already down about 5.3% year-to-date heading into this week.

Memory is not a small line item for Apple. It accounts for around 9% of iPhone costs and 15% of iPad and Mac costs, Citi noted. With DRAM prices moving as sharply as forecast, that adds up fast.

But Malik argues Apple is better equipped to handle the pressure than most.

“We believe Apple’s procurement team and purchasing strategies have improved over the years,” he wrote. “And Apple likely has the best negotiation power among all smartphone vendors.”

Gross Margin Under Pressure

Citi estimates the memory spike will cause a 140 basis-point drag on Apple’s gross margins in 2026. That eases to 48 basis points in 2027 as DRAM prices are expected to stabilize. The 2028 outlook was left unchanged.

Smaller rivals with less purchasing leverage are likely to feel the pinch more. Citi believes that gap could actually help Apple pick up market share as competitors struggle to manage their cost structures.

Citi kept its iPhone shipment forecasts steady — 1.3% growth in 2026 to around 246 million units, and 5.9% growth in 2027 to around 262 million units.

New Product Launches Signal Resilience

Apple made a surprise move last week, launching two new products at notably lower price points. The iPhone 17e starts at $599, well below the $799 entry price of the standard iPhone 17. The MacBook Neo also starts at $599 — a 40% discount compared to the previous MacBook Air at $999.

Evercore ISI analyst Amit Daryanani pointed to those launches as evidence Apple is managing the inflation better than the market may be pricing in.

Malik also highlighted Apple’s ability to adjust pricing across its product lineup and tweak its bill of materials to offset cost headwinds. Apple has already raised prices on some MacBook models while holding iPhone prices steady in certain configurations.

The analyst noted Apple’s services business and AI roadmap as further support. An expected Siri upgrade powered by Google’s Gemini technology is due later this year. Apple’s installed base sits at roughly 2.5 billion active devices.

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