Dan Ives: Apple had to raise prices and this was the right time
Speakers
Dan Ives
— Managing Director, Wedbush Securities
Summary
Dan Ives of Wedbush Securities defends Apple's recent price hikes, arguing they are a necessary margin-protection move ahead of a major iPhone hardware cycle and that the stock's sell-off is an overreaction. He also highlights that historic memory price increases benefit Micron and Samsung, while mega-cap underperformance partly reflects AI capex funding dynamics.
- Apple raised prices to safeguard margins as memory costs surge; iPhone price increase of $150-$200 expected.
- Dan Ives sees only 1-2% churn on high-end products and under 2-3% EPS impact, calling the stock decline an overreaction.
- Apple is entering a three-year massive hardware cycle, and its supply chain expertise will navigate the cost pressures.
- Memory price hikes are historic and directly benefit Micron and Samsung.
- Microsoft also raised Xbox prices due to soaring memory and storage costs.
- Mega-cap weakness stems partly from heavy AI capex spending, but a reversal is possible once monetization emerges.
Ideas
Apple price hike overreaction, buy the dip
Apple's price increases on products, including a $150-$200 iPhone hike, are a strategic move to protect margins ahead of a massive three-year hardware cycle. The 1-2% expected churn on high-end products is minimal, and the EPS impact is limited to under 2-3%. The stock's sell-off on gross margin fears is an overreaction; Apple's supply chain expertise, partnerships, and gradual approach will navigate historic memory cost increases and keep margins stable, making the current sell-off a buying opportunity.
