Apple adds $33 billion to supply commitments alongside $24 billion share buyback

At Tuesday’s open, Apple shares are likely to take their cue from the margin guidance: it reveals component inflation eroding profitability at the same time as the tariff refund benefit is fading. For memory chipmakers, the warning that memory prices will continue to rise is a supportive signal for their pricing power. For other hardware makers that have less room to pass on costs, that same warning is a caution. The revenue forecast points to healthy holiday demand, which could soften the margin miss. The $33 billion increase in purchase obligations indicates Apple is securing supply at higher prices instead of taking the risk of shortages.

• Apple outpaces Q4 estimates as iPhone and Mac lift revenue above $114 billion

Apple enters the holiday period with healthy demand, though margins will be slimmer, because higher memory prices and AI expenses are dulling the glow of a record September quarter.

Summary:

• For the fiscal first quarter — the December quarter — Apple projects total revenue growth of 7% to 10%, with services growth of 8% to 9%
• Gross margin is guided to 45% to 46%, down from the 47% to 48% range Apple had forecast for the September quarter
• That margin view includes memory chip costs and Siri AI expenses; the CFO said memory purchase prices are expected to continue rising
• Between the June and September quarters, manufacturing purchase obligations increased by $33 billion
• Apple repurchased $24 billion of its shares in the fourth quarter
• Apple said the vast majority of its tariff refunds have been received

On the company’s earnings call, Chief Financial Officer Kevan Parekh said Apple expects revenue to grow 7% to 10% in the holiday quarter, while warning that higher memory chip prices and Siri AI spending will push gross margin down to 45% to 46%.

For the fiscal first quarter, running from October through December, the margin forecast sits below the 47% to 48% range Apple had guided for the September quarter. Parekh said the outlook accounts for higher memory costs and Siri AI-related expenses, and that Apple expects memory purchase prices to keep climbing.

Apple also indicated that it is making a larger commitment to supply. Manufacturing purchase obligations climbed by $33 billion from the June quarter to the September quarter, Parekh said, a sign the company is securing components in a market that is tight and becoming more expensive.

Services, Apple’s high-margin segment, is forecast to expand 8% to 9% in the quarter. The December period will be the first full holiday season for iPhone 18 Pro sales; the September quarter included only about nine days of those sales.

The guidance came after record fourth-quarter results: revenue was about $114.5 billion, 12% higher than a year earlier, and earnings per share were $2.10 versus estimates of $2.00. On the call, Apple said tariff refunds contributed 5 cents to earnings per share. According to Parekh, Apple has now received the vast majority of those refunds, a signal that the support will not recur in coming quarters. Chief Executive John Ternus said Apple had increased prices to help offset higher component costs.

Apple kept returning capital at a steady pace, repurchasing $24 billion of its shares in the fourth quarter.

Ternus’s first call as chief executive leaves investors to weigh healthy demand against rising cost pressure. The central question heading into 2027 is likely to be how far memory prices climb, and how much of that increase Apple can pass on to customers without damaging sales.