Why Apple Stock Dropped on Friday

Shares of Apple (NASDAQ: AAPL) fell on Friday after the iPhone maker warned of supply shortages and soaring component costs that were delaying sales and denting its profit margins.

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iPhones and Macs are selling well

Apple's revenue grew 16% year over year to a whopping $109 billion in its fiscal 2026 third quarter, which ended on June 27.

The gains were fueled by a 22% surge in iPhone sales to $54 billion. Mac sales were also strong, with revenue rising 29% to $10 billion, aided by the launch of Apple's more affordable MacBook Neo.

All told, Apple's earnings climbed 29% to $2.02 per share. That topped Wall Street's estimates, which had called for per-share profits of $1.94.

Yet Apple's growth is decelerating

Investors, however, focused more on Apple's lackluster sales outlook. Management guided for revenue to increase 9% to 11% year over year in its fiscal third quarter. That fell short of the 12% growth Wall Street had projected.

During a conference call with analysts, chief financial officer Kevan Parekh warned that supply shortages would likely worsen and impact iPhone, Mac, and iPad sales.

Booming demand for artificial intelligence (AI) infrastructure has driven up memory chip costs, weighing on Apple's margins and forcing it to raise prices.

But the good news is that CEO Tim Cook said the most pressing component shortages were due to higher-than-expected sales of iPhones and Macs.

"The root cause of it is not a regular supply issue," Cook said. "It's a demand forecast issue, to be candid, where the iPhone and the Mac are both doing remarkably better than we thought they would do."

That's a good problem to have -- and one that Apple will eventually rectify as it works to bolster its supply chain.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.