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Apple Faces Supply Constraints, Currency Drag in Q4 Amid AI Strategy Questions, UBS Says

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Apple (AAPL) faces currency headwinds and tightening memory-supply conditions that are expected to weigh on iPhones, Macs and iPads in fiscal Q4, UBS Securities said Thursday in a report.

The company's "lack of a robust AI strategy remains a challenge" amid "limited estimate upside and an elevated valuation," the report said.

Foreign-exchange fluctuations are expected to trim Q4 growth by 250 basis points, the report said. Apple expects gross margin of 47% to 48%, including a 100 basis point tariff refund, and UBS projects the figures to drop to 45.9% in the following quarter as the tariff benefit fades.

"Investor fund flows could shift back toward hyperscalers, semiconductors, and networking and optical companies, capping Apple's valuation multiples," the report said.

UBS maintained its neutral rating on Apple stock with a $296 price target.

Price: $306.87, Change: $-26.56, Percent Change: -7.97%

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