Apple Inc (NASDAQ:AAPL, XETRA:APC) has a memory problem, just not the kind that hurts.
While rising memory chip prices are squeezing smartphone rivals and eroding their margins, Apple is turning the same dynamic to its advantage. The company's ability to lock in adequate silicon and memory supply has handed it a competitive edge over Android device makers, translating into market share gains in China, Europe, and beyond, according to UBS analysts ahead of Apple's fiscal second-quarter earnings report.
UBS expects Apple to post March quarter revenue of approximately $109 billion, edging past estimates, with iPhone revenue of $56.2 billion carrying most of the weight. Supply chain checks and sell-through data suggest modest outperformance, while the Mac lineup, buoyed by the lower-priced Neo and a Mac mini increasingly pressed into service running AI agents, is holding its own.
The June quarter looks more interesting. UBS lifted its revenue forecast by roughly 4% to $102 billion, projecting iPhone revenue up approximately 20% year over year as Apple continues to poach customers from the Android ecosystem. The firm raised its iPhone unit estimate for the period to 50.3 million from 46.5 million.
Not everything is running in Apple's favor. Blended DRAM costs are up an estimated 160% year over year, and NAND roughly 80%, pressuring product gross margins.
UBS sees overall gross margin settling into a 47%-to-48% range for June, a step down from the current quarter's 48%-to-49% guide. Services, growing at around 14% with gross margins near 76.5%, is expected to cushion the blow.
UBS raised its price target to $287 from $280 and bumped its fiscal 2026 and 2027 EPS estimates to $8.46 and $9.28, respectively, while trimming its valuation multiple to 30 times forward earnings.