Apple (AAPL) remains in a strong position to increase prices across its Mac computers and iPads in response to rising memory and storage costs without sacrificing hardware performance or risking higher customer churn, Wedbush Securities said Thursday in a note.
The surge in memory prices is pressuring margins and underscores the need for Apple to diversify its supply chain, and the chip-design and manufacturing deal Apple announced with Intel (INTC) earlier this month supports that strategy, Wedbush said.
"We now see a significant reallocation of semiconductor manufacturing capacity
from consumer electronics towards AI infrastructure with Apple now in the midst of locking in domestic chip capacity ahead of a multiyear AI-driven hardware cycle," the note said.
Wedbush reiterated its outperform rating on Apple stock with a $400 price target.
Apple shares fell 4.8% in Thursday trading, and Intel declined 1.4%.
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