Apple Stock Price Forecast: Product Price Hikes Trigger Over 6% Drop, May Continue to Correct

TradingKey - On Thursday (June 25) Eastern Time, Apple ( AAPL) shares closed down 6.12% at $275.15, after hitting an intraday low of $273.75. From a market perspective, Apple not only underperformed the Nasdaq today but also became one of the key heavyweight stocks dragging down the performance of mega-cap tech. The immediate catalyst for the sell-off was Apple's recent announcement of price hikes across multiple hardware products, prompting investors to reassess its future demand, profit margins, and brand pricing power.

Why did Apple raise its product prices?

Apple's latest round of price hikes mainly covers product lines such as Mac, iPad, Apple TV, HomePod, and Vision Pro, with major hardware like the MacBook, iPad Air, and iPad Pro seeing more pronounced increases. The core reason given by the company is the sharp rise in memory and storage chip costs, the fundamental cause of which is the rapid expansion of AI data center construction, driving up the prices of key components like DRAM, NAND, and SSDs. This means the AI boom is feeding back into the consumer electronics industry through supply chain costs.

Over the past year, Nvidia ( NVDA ), AMD ( AMD ), Micron ( MU) and other AI hardware chain companies have benefited from the surge in data center demand, but device manufacturers like Apple and Dell ( DELL ), and Lenovo face higher component procurement costs. For Apple, choosing to absorb these costs would directly squeeze gross margins, while opting for price hikes could dampen consumers' willingness to upgrade. Apple's decision to raise prices this time indicates that cost pressures have become too high to be fully absorbed internally.

Price hikes are a short-term negative for stock prices, as the core concern lies in demand elasticity.

From a fundamental perspective, price increases are not necessarily entirely negative. Apple possesses some of the strongest brand pricing power in the world; if consumers are willing to accept higher prices, these hikes can help the company hedge against rising costs and protect its gross margin. However, it is worth noting that the external environment Apple currently faces is far from easy.

First, Macs and iPads are not essential, high-frequency consumer goods, meaning consumers are more price-sensitive. Compared to the iPhone, Macs and iPads have longer replacement cycles, and some users may postpone purchases following a price hike—especially in an environment where demand for PCs and tablets is already weak, potentially putting further pressure on sales volume. Second, since the beginning of this year, Apple has already faced challenges such as a lack of AI innovation, slowing iPhone growth, and mounting regulatory pressure, which has eroded the market's patience regarding its valuation. Although product price hikes help protect profit margins, they could exacerbate investor concerns over declining sales.

While Apple did not raise iPhone prices this time, the company hinted that future iPhones could also face upward pricing pressure. As the iPhone is Apple's most core revenue driver, if future models also see price hikes due to rising memory and storage costs, the market will focus closely on whether consumers are willing to foot the bill for hardware costs in the AI era. Once sales volume is impacted, the logic supporting Apple's high valuation may continue to face pressure.

Apple Stock Technical Analysis: Share Price May Pull Back to Around $250

Apple stock price daily chart, Source: TradingView

Looking at Apple's daily chart, the stock plunged 6% on Thursday, briefly touching the 0.786 Fibonacci retracement level of $275, but managed to close above it, indicating some support at this level.

Investors should monitor whether Apple's stock price closes below $275 today. If it breaks below this level, it could open up room for a correction toward $252, or even a further pullback to $236.

Conversely, if Apple's closing price holds above $275 today, the stock may continue to rise and test its all-time high of $317.40.