Investopedia Markets News (all except PF)

The benchmark S&P 500 index has hit a series of record highs, boosted in recent weeks by the strength of earnings.
Credit: Michael Nagle / Bloomberg / Getty Images

Key Takeaways

• First-quarter earnings-per-share beats are tracking at 5% above consensus estimates, higher than the 3% average going back to 2001, according to BofA Global Research.
• Positive earnings surprises by three of the Magnificent 7 companies that reported last week were the largest contributors to the overall growth rate of S&P 500 companies for the first quarter, according to FactSet's John Butters.
• The strength of earnings has helped offset ongoing concerns about the impacts of the Iran war on the health of the economy and the operating environment for businesses.

The last big week of earnings is here, and investors have good reason to be hopeful that the results will continue to power the stock market to record highs.

Three-quarters of the S&P 500's companies have reported quarterly results, beating analysts' expectations on revenue and earnings per share at rates unseen since 2021, according to BofA Global Research. First-quarter earnings-per-share beats are tracking at 5% above consensus estimates, higher than the 3% average going back to 2001, BofA data show. And tech continues to steal the spotlight.

Though companies that beat both top- and bottom-line estimates were rewarded by investors, chipmakers, including NXP Semiconductors (NXPI), were disproportionately boosted for good results. The average semiconductor stock rose 12% the day after reporting results, almost three times the average S&P company, the BofA data show.

Tech sector strength has sent major stock indexes to a series of highs over the last several weeks, and the good news on earnings has added to the investor optimism, despite the economic uncertainty tied to the Iran war. All signs point to the S&P continuing its climb, at least in the near term, market experts say.

WHY THIS MATTERS TO YOU

Earnings strength illustrates the resilience of U.S. businesses and the broader economy, offsetting investor concerns about geopolitical uncertainty.

More major tech companies are reporting in the coming days, including Palantir (PLTR), Advanced Micro Devices (AMD) and Arista Networks (ANET). Several S&P 500 companies tied directly to the health of consumer spending, such as Marriott International (MAR), Airbnb (ABNB), McDonald's (MCD) and Walt Disney Co. (DIS), are also due to release results.

In the past week, positive EPS surprises reported by three of the Magnificent 7 companies—Alphabet (GOOGL), Amazon (AMZN) and Meta Platforms (META)—were the largest contributors to the rise in the S&P's overall earnings growth rate for the end-March period, according to FactSet. Blended results for the first quarter, a combination of companies that have already reported and estimates for the ones that haven't yet, suggest overall earnings growth of 27%—which, if realized, would be the highest growth rate reported by the overall S&P since the fourth quarter of 2021, FactSet's John Butters said in a Friday report.

That strength is translating to higher annual EPS estimates for 2026 and 2027, with analysts' revisions trends appearing "much stronger" than the historical average of the 2001 to 2024 period, BofA's equity and quant strategy team including Savita Subramanian wrote in a report published Sunday.

Tech spending appears to be picking up, though, investors didn't always appear all that keen about it. Hyperscalers that reported last week—Amazon, Alphabet, Microsoft (MSFT) and Meta—guided 2026 capex by over $50 billion above consensus estimates in total; Meta's stock was dinged last week after it guided capex higher, while Alphabet's popped. BofA's semiconductor analysts project capex across all hyperscalers to top $800 billion this year and say spending could reach $1 trillion in 2027.

"Even with many one-time gains, Q1 financial reporting season is clearly better than average, both in terms of earnings and revenue beat rates," DataTrek's Nicholas Colas and Jessica Rabe wrote in a note Sunday evening. They maintained their bullish position on U.S. stocks and said the S&P could continue rallying in the near-term.

Disney shares are about 10% off from where they started the year.
Credit: Richard Baker / In Pictures / Getty Images

Key Takeaways

• Disney is due to report earnings Wednesday for the first time under new CEO Josh D'Amaro, who took over the entertainment giant in March.
• Traders are anticipating a move of up to 6% in the days that follow, with Disney seen posting growing revenue and profits.

The Walt Disney Company is set to report earnings Wednesday for the first time under new CEO Josh D'Amaro, with traders expecting a big move in the entertainment giant's stock after the results.

Based on current options pricing, Disney (DIS) shares are expected to move up to 6% by the end of the week. A move of that size from Monday's levels around $102 could lift the stock above $108, its highest point since February, before D'Amaro took over in mid-March. The low end of that range could drag shares below $96.

Disney shares have lost ground recently, and are down about 10% from where they started the year, amid concerns that high fuel prices and geopolitical uncertainty caused by the Iran war could hurt Disney's experiences segment.

Why This Matters to Investors

Many investors will be watching whether Disney's new CEO could offer more insights on his vision for the company's future during Wednesday's earnings call.

UBS analysts wrote recently that they expect the costs of Disney's investments in its cruise ships and theme parks, along with the timing of some of its theatrical releases, could push most of Disney's growth to the second half of its fiscal year.

Disney's fiscal second-quarter revenue is seen coming in at $24.83 billion, up about 5% year-over-year, while adjusted earnings per share are expected to have climbed 4 cents to $1.49, according to Visible Alpha estimates.

Wall Street analysts are widely bullish on Disney's outlook, with all seven analysts with current ratings tracked by Visible Alpha calling the stock a "buy." Their average price target of $131 would suggest nearly 30% upside from its recent levels.

The IRS Taxpayer Advocate warned the U.S. might appeal the ruling.
Credit: Getty

Key Takeaways

• A court case from last year means millions of taxpayers who were assessed late fees during the pandemic could be owed refunds.
• The court ruled that the IRS violated a federal law that prohibited the agency from setting filing deadlines during the COVID-19 federal disaster declaration.
• Taxpayers have until July 10 to file a refund claim with the IRS.

If you paid a late fee or penalty to the Internal Revenue Service between January 2020 and May 2023, you may be owed a refund, and the IRS's watchdog says tens of millions of Americans could be in the same boat. You have until July 10 to file a claim.

A federal court ruled in November that pandemic-era disaster provisions suspended tax filing and payment deadlines from Jan. 20, 2020, through May 11, 2023, the full 3.5-year period of the federal emergency declaration. On Friday, the National Taxpayer Advocate warned that "tens of millions" of taxpayers may be entitled to refunds or abatements as a result.

"Most taxpayers, even most tax professionals, did not foresee that filing deadlines and payment deadlines would be postponed for this long," the National Taxpayer Advocate, Erin Collins, wrote in the May 1 notice. "But that is the logical extension of what the court ruled."

Collins cautioned that the Department of Justice may still appeal.

Refund Claims Have Time Limits

Anyone who paid late-filing or late-payment penalties and interest that accrued during the disaster period may now have grounds for a refund.

According to the Taxpayer Advocate, three categories of charges may be refundable or eligible for abatement: penalties for failing to file on time, pay on time, or make estimated tax payments; interest that began accruing earlier than it should have; and overpayment interest for the 2020–2023 disaster period.

Why This Matters

IRS penalties and interest can quietly add up, so the chance to reclaim those funds could put real money back in your pocket.

Taxpayers have until July 10 to meet the refund deadline. Form 843 must be filed on paper—there's no electronic option. The Taxpayer Advocate recommends sending claims by certified mail so you have proof of timely submission if your form gets lost.

Taxpayers Should Check Their IRS Records

President Donald Trump declared the pandemic a nationwide emergency effective Jan. 20, 2020, and former President Joe Biden ended it on May 11, 2023. In the November case, the court ruled that federal law prohibited the IRS from setting filing deadlines, collecting interest, or assessing penalties during that 3.5-year window, the legal hook for the refund claims now in play.

Taxpayers seeking a refund for this period should begin by checking their tax records from those years for any late fees or penalties. Taxpayers can get their transcripts online at IRS.gov or by calling the IRS at 800-829-1040.

A tax professional can assist you with filing Form 843. The Taxpayer Advocate has urged the IRS to grant a six-month filing extension and build an electronic submission portal, but unless that happens, your paper claim must reach the IRS by July 10.

With Monday's gains, BlackBerry shares are up over 50% from the start of the year.
Credit: Thomas Fuller / SOPA Images / LightRocket / Getty Images

Key Takeaways

• BlackBerry shares extended their recent rally Monday, following a report of strong growth in its QNX business.
• The software maker is behind the operating system that runs driver assistance features in more than 275 million cars, and provided half of BlackBerry's revenue last year.

BlackBerry's stock has been on a tear lately amid some signs of fresh growth. Could it be on its way to making a comeback?

Shares of BlackBerry (BB) were up over 5% in recent trading, at their highest point in more than a year, following a report from The Wall Street Journal over the weekend pointing to strong growth in its QNX business that makes the software behind a wide range of driver assistance programs, among other things.

Though well off their 2008 highs, Monday's move adds to a torrid rally for BlackBerry's stock this year, leaving the shares up more than 50% for 2026 so far.

Why This Matters to Investors

The report could boost confidence in a comeback for BlackBerry, powered by software rather than the hardware it was once known for.

BlackBerry, which no longer makes phones, said in its latest earnings report last month that QNX's software is now being used in over 275 million cars worldwide, with the QNX segment accounting for nearly half of Blackberry's fiscal 2026 revenue at $268 million.

QNX is also working to grow its reach beyond safety systems in cars, with its software also powering medical devices and other industrial machinery, per the Journal.

BlackBerry shares have also benefitted in recent weeks from optimism around QNX's expanded partnership with Nvidia (NVDA), as the AI chip leader signed on to use QNX software alongside its own hardware to develop more uses for physical AI. Nvidia shares were down about 1% in recent trading, and have added about 5% since the start of the year.

News of the day for May 4, 2026

The S&P 500 and Nasdaq closed last week at record highs, after posting their biggest monthly gains since 2020 in April.
Credit: Michael M. Santiago / Getty Images

Stock futures are slightly lower Monday while oil prices rise following reports that a U.S. ship was struck by missiles in the Strait of Hormuz; President Trump said over the weekend the U.S. would help "guide" ships through the strait, though Iran threatened to retaliate if that happened; Palantir's earnings are due after the closing bell; Earnings from a number of consumer goods and services companies are also coming this week, along with the April jobs report; and GameStop has offered nearly $56 billion to buy eBay. Here's what you need to know today.

Stocks Slip, Oil Gains as Investors Track Iran Developments

Stock futures are slipping this morning as investors react to the latest news in Iran (more on that below), and look ahead to another busy week of earnings and economic data. Futures tied to the Dow Jones Industrial Average were down 0.4% recently, while S&P 500 and Nasdaq futures fell 0.2% and 0.1%, respectively. On Friday, the S&P 500 and Nasdaq closed at record highs, while the Dow ticked lower to start the month after markets soared in April. WTI futures, the U.S. crude oil benchmark, were up 3% at $105 per barrel after Iran said a U.S. ship was hit by a pair of missiles while entering the Strait of Hormuz. Gold futures fell 1.6% to about $4,570 an ounce, while bitcoin traded at $78,800, after hitting an overnight high near $80,500. The yield on the 10-year Treasury, which affects interest rates on consumer loans, rose to 4.41% from Friday's close of 4.38%.

Missiles Reportedly Hit US Ship After Trump Says US Will Guide Ships Through Strait

Trump floated a new plan to break the logjam of global shipping caused by his war in Iran over the weekend, posting on social media Sunday that the U.S. would "guide" foreign ships not involved in the conflict out of the Strait of Hormuz. Other U.S. officials have reportedly told ships in the region to cross the Strait through the strait near Oman, where the U.S. military has established an "enhanced security area," per The Associated Press. It remains unclear whether U.S. ships will directly escort ships through the strait, or whether the ships would be defended by U.S. forces if they are attacked by Iran. State media in Iran reported early Monday that the Iranian military is claiming that a U.S. ship was hit by two missiles while entering the strait, according to Reuters. U.S. officials have denied that a ship was hit.

Palantir Earnings Due After Closing Bell Today

Another busy week of earnings reports kicks off Monday, with Palantir (PLTR) set to report quarterly results after the closing bell. The software maker and government contractor is expected to report another quarter of rising revenue and profits, as its contracts with both the federal government and private businesses look to be growing, according to analysts. The stock, along with many other software firms, has been pressured this year over concerns that last year's rally left it overvalued, and that the industry could be further disrupted by AI products. Palantir shares were up 2% in recent premarket trading.

Earnings from Consumer Giants, Jobs Report In Focus This Week

While Big Tech earnings were the focus of the market last week, this week will largely be dominated by other household names across the travel, fast food and entertainment industries. Chipmaker Advanced Micro Devices (AMD) will report after markets close Tuesday, giving investors their latest look into demand for AI hardware. On Wednesday, results from Marriott International (MAR) will show how travel spending is holding up amid current economic uncertainty. The health of the American consumer will also be in focus with results from fast food giants Restaurant Brands Group (QSR), McDonald's (MCD), and Wendy's (WEN) this week. The Walt Disney Company (DIS) is set to report earnings Wednesday, its first under new CEO Josh D'Amaro, who took over the top job from Bob Iger back in March. On Friday, the April jobs report and a consumer sentiment survey for May will shed light on how the economy is reacting to the Iran war, and how that is affecting the mood of American consumers and employers.

eBay Stock Gains After GameStop Makes $56B Takeover Offer

Shares of eBay (EBAY) are rallying this morning following news over the weekend that GameStop (GME) has made an offer to buy the online auction platform. GameStop has offered to acquire the company at $125 per share, a 46% premium from the stock's early February price, when GameStop started to build a position in the eBay. The deal, valued at about $55.5 billion, would be made up of half cash and half GameStop stock. GameStop said it believes it can help deliver at least $2 billion in cost cuts in the first year after a deal. GameStop CEO Ryan Cohen told The Wall Street Journal that he sees untapped value in eBay, and said it could become a competitor to Amazon (AMZN). eBay shares were up 8% at around $112 recently, while GameStop shares fell 3%.

Restaurant Brands International, the parent company of Burger King, is set to report this week.
Credit: jetcityimage via Getty Images

This week is all about the American pocketbook, with a new jobs report offering a view of the labor market and earnings from food and travel giants shedding light on how people are spending. 

April jobs data, due Friday, could help clarify whether March's jump in hiring was an anomaly, or the beginning of a trend. Employers added more jobs than expected in March, breaking from months of relatively low hiring and firing. Many companies have avoided shaking up their workforces too much while waiting to see how the economy reacts to tariffs, an immigration crackdown, and rising energy prices brought on by war with Iran. The Fed will also be watching the job market as it plots its next interest-rate moves.

Big tech companies dominated last week's earnings headlines. This week, attention shifts to consumer goods and services companies ranging from The Walt Disney Co. to Wendy’s. Americans, especially higher-income households, have continued spending, despite feeling downbeat about the economy in recent months.

Consumer spending fuels the majority of economic growth in the U.S., and economic activity—as measured by GDP—came in below expectations last quarter. Investors will be on the lookout for signs that consumers are cutting back.

Results from Marriott International and Airbnb may shed light on how rising airfares and gas prices are impacting travel. Earnings from fast-food companies, including the parent company of Burger King, are slated to land as the industry grapples with sluggish demand from lower-income customers.

Market Recap

The three major U.S. indexes all logged weekly gains as the calendar turned to a new month after a blockbuster April. Earnings results from tech giants shaped the week as investors showed a renewed appetite for risk. On Friday, the S&P 500 and Nasdaq Composite finished at record highs. For more, read Friday markets roundup here.

This Week's Top Events

Here's a look at notable events in the week ahead. TradingView publishes a more detailed calendar, but clicking the link will take you off the Investopedia site.

• Monday, May 4: Palantir Technologies (PLTR) is set to release its first-quarter results after the closing bell and host a webcast at 5 p.m. ET. The software company beat expectations last quarter and got a nod of approval from the president. Shares have recently slumped as investors are wary of competition from Anthropic.
• Tuesday, May 5: Advanced Micro Devices (AMD) is scheduled to report first-quarter results after the stock market closes, and hold a conference call at 5 p.m. ET. AMD shares have climbed as recent headlines suggest the AI expansion is fueling demand for its chips. The company announced plans to raise prices and a massive deal with Meta (META).
• Wednesday, May 6: Marriott International (MAR) is slated to release its first-quarter results at 7 a.m. ET, followed by a conference call at 8:30 a.m. ET. Airbnb (ABNB), is set to report Thursday. Travel spending has held up, according to United Airlines (UAL), although the carrier also expects higher prices to weigh on sales in the back half of the year. 
• Wednesday: Restaurant Brands Group (QSR), which owns Popeyes and Burger King, is set to release first-quarter results, followed by a conference call at 8:30 a.m. ET. McDonald's (MCD) first-quarter call is on Thursday, while Wendy's (WEN) earnings are due Friday.
• Wednesday: Walt Disney Co. (DIS) is scheduled to publish its fiscal second-quarter results before the opeaning bell, and hold a live webcast at 8:30 a.m. ET. Investors will look for details on how CEO Josh D’Amaro plans to grow Disney’s streaming, theme park and cruise businesses.
• Friday, May 8: The Bureau of Labor Statistics is set to release April job market data at 8:30 a.m. ET. Employers added some 178,000 jobs in March, and the unemployment rate fell to 4.3%. 
• Friday: The University of Michigan is scheduled to release May data on consumer sentiment at 10 a.m. ET. The index recorded a 6% drop from February to March, though there are signs the ceasefire with Iran has brightened the mood.

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New CEO Greg Abel told investors at Saturday's event that he sees a "unique opportunity" for Berkshire to excel across its many businesses
Credit: Dan Brouillette / Bloomberg / Getty Images

Key Takeaways

• Berkshire Hathaway's cash and cash equivalents rose to a record $397.38 billion in Greg Abel's first quarter as CEO.
• Operating earnings jumped nearly 18% from a year ago, after the conglomerate reported a 30% drop in the previous quarter.
• Abel hosted Berkshire's annual meeting for the first time without Warren Buffett on stage with him.

Berkshire Hathaway's cash pile reached a new high, while operating earnings surged, in the company's first quarter without Warren Buffett as CEO.

Berkshire's (BRK.A, BRK.B) cash and equivalent holdings climbed to a record $397.38 billion as it trimmed its stock holdings in the first quarter under new CEO Greg Abel, the company said Saturday. Berkshire said it sold $24.09 billion in equity securities in the quarter, while it bought $15.94 billion. Apple (AAPL), American Express (AXP), Bank of America (BAC), Coca-Cola (KO) and Chevron (CVX) remained its largest holdings.

Operating earnings jumped nearly 18% to $11.35 billion, largely attributable to a rebound in the company's insurance business. In the previous quarter, Berkshire had posted a nearly 30% year-over-year drop in operating earnings as the company took write-downs of its stakes in Kraft Heinz (KHC) and Occidental Petroleum (OXY).

The company also restarted its buyback program for the first time in nearly two years, repurchasing $234.2 million of its own shares over the period, following a long-term playbook whenever the shares fall below their perceived intrinsic value. Abel has been buying up Berkshire's shares himself, a show of confidence in future gains.

The new CEO was in the spotlight at Saturday's shareholder meeting, where he sought to assure shareholders of his commitment to the the firm's longstanding values, and its potential for future growth, after Buffett stepped down at the end of last year. Abel told investors he sees a "unique opportunity" for Berkshire to excel across its many businesses that are "fundamental and really central to American businesses and American industry and to the American consumer."

Why This Matters to Investors

Investors have been eager to see how Abel could shape Berkshire's path forward, with Saturday's event seen as an opportunity to shore up confidence in his leadership.

The 95-year-old Buffett, who was in the audience at Saturday's event, took the microphone to tell investors the company “couldn’t have made a better decision" than Abel for the top role, saying that "he's the right person."

Apple CEO Tim Cook, who was also in attendance, got a shoutout from Buffett, who commented pointedly on Cook's record after the iPhone maker recently announced its head of hardware engineering, John Ternus, will take over the top job from Cook at the start of September.

“When Tim Cook went into the top position at Apple, he succeeded a legend," said Buffett, and "not many people knew Tim's name." However, Berkshire's shareholders have been heavily rewarded for standing by Apple through Cook's tenure, Buffett said.

However, investors who had hoped Saturday's event could bring more specific insights into Abel's investment ideas and plans for the firm, such as how Berkshire's cash pile could be allocated, may have to wait a bit longer. Abel said Saturday he is “absolutely collaborating” with Buffett on the firm's portfolio.

(You can swatch the event, which kicked off at 9:30 a.m. ET and is being exclusively streamed by CNBC, here.)

This article has been updated since it was first published to include more recent developments from Berkshire's annual shareholder meeting.

AMD shares have rallied to a series of record highs in recent weeks.
Credit: SeongJoon Cho / Bloomberg / Getty Images

Key Takeaways

• Advanced Micro Devices is scheduled to report earnings after markets close Tuesday, with traders expecting big moves from the chipmaker's stock.
• Sales and profits are projected to have surged year-over-year on growing AI demand.

Advanced Micro Devices is slated to post earnings after the closing bell Tuesday, with the chipmaker's stock seen potentially climbing to new highs following the results.

Traders expect AMD (AMD) shares could swing up to 8% in either direction by the end of the week, based on recent options pricing. A move of that size from Friday's record close just above $360 could lift shares to a new high around $389. The low end of that range could pull the shares back to $331.

AMD shares have gained nearly 60% since the start of the year, setting a number of records in the last few weeks as shares of AI hardware makers rallied amid signs of growing AI demand.

Why This Matters to Investors

Expectations are riding high for AMD to impress after its recent stock rally, and in the wake of better-than-expected results from rivals such as Intel.

Following Intel's strong report last month, analysts from D.A. Davidson upgraded AMD to a "buy," and hiked their price target to $375 from $220. The analysts said they see "meaningful upside" to estimates for AMD, with the company and Intel both poised to benefit from rising demand for AI chips.

Analysts currently forecast that AMD will report $9.88 billion in revenue along with adjusted earnings of $1.27 per share, each up about 33% year-over-year, according to estimates collected by Visible Alpha.

Wall Street analysts largely have positive views on AMD. Six of the nine analysts with current ratings tracked by Visible Alpha consider it a "buy," compared to three neutral ratings, though the stock has already outpaced their mean target of $295 with its recent gains.

This article has been updated since it was first published to reflect more recent prices.

Bitcoin sometimes benefits from a risk-on sentiment toward stocks.
Credit: Tayfun Coskun / Anadolu via Getty Images

Key Takeaways

• The price of bitcoin remains down about 10% year-to-date, while a risk-on recovery rally has lifted U.S. stocks into positive territory.
• Nothing—movement in the Clarity Act, nor crypto conference season—appears to be helping drive bitcoin meaningfully higher.

A recovery rally in risk assets isn't doing much for bitcoin. What gives?

U.S. stocks have risen furiously, breaking records and posting new highs. But the world's largest cryptocurrency—recently below below the $79,000 level—isn't doing much lately in comparison. Bitcoin is down about 10% year-to-date, lagging the S&P 500, gold, and even the U.S. dollar index, despite getting a lift since the start of the Iran conflict.

Bitcoin watchers cite a raft of reasons why a booming run for stocks—April was one of the best months in years —hasn't translated to bitcoin. "They don't always move in lockstep, especially over shorter timeframes," said Max Kahn, chief of crypto advisory firm Digital Wealth Partners, via email.

WHY THIS MATTERS TO YOU

Though the risk-on recovery rally has pushed U.S. stock benchmarks to fresh records, bitcoin continues to trade sideways.

At present, he said, stocks are getting more of a lift from earnings, buybacks and the outlook for monetary policy; bitcoin, meanwhile, is more dependent on factors including flows to exchange-traded funds and broader investor positioning. Meanwhile, some digital asset experts said that the average bitcoin investor may be inclined to sell at current levels near $80,000 after sitting at a loss for months.

And a piece of crypto legislation some investors think can re-energize crypto, known as the Clarity Act, has been slow to progress. Big banks have sparred with the crypto industry over stablecoin yields, and more recently disagreement over proposed ethics language that bars senior government officials from personally profiting from crypto assets, including the Trump family's crypto ventures, has also been a stumbling block.

White House adviser Patrick Witt, at the Bitcoin 2026 conference in Las Vegas earlier this week, said the industry would "take off like a rocket ship" once the Clarity Act was signed into law. But Polymarket traders view the chance of it becoming law this year at less than coin-flip odds.

The holdup "stems not from any single issue but from the number of unresolved questions," according to Alex Thorn, head of research at Crypto firm Galaxy, in a report last month.

Alaska Rep. Nick Begich, also at the conference, said he planned to revive a bill called the BITCOIN Act, which among other things would establish the cryptocurrency as a federal strategic reserve asset and require the U.S. to buy 1 million bitcoin for its coffers over five years.

For now, some experts think, bitcoin may be rangebound. Spot bitcoin ETFs have suffered nearly half a billion dollars in outflows this week.

Profit margins on Apple products declined two percentage points last quarter, partly due to higher memory costs.
Credit: Eric Thayer / Bloomberg via Getty Images

Key Takeaways

• Apple on Thursday warned pressures from an ongoing memory supply shortage would likely worsen later this year.
• Memory prices—and stocks—have soared over the past year due to surging demand from AI data centers.

A reminder from Apple, just in case Wall Street forgot: There’s a memory shortage. 

Apple (AAPL) CEO Tim Cook on Thursday warned headwinds from a memory supply crunch are only getting stronger—and not just for the rest of the first half. “Beyond the June quarter, we believe memory costs will drive an increasing impact on our business,” Cook told analysts on Apple’s quarterly earnings call Thursday, according to a transcript supplied by AlphaSense.

That could hit profits: The company forecast gross margins would come in between 47.5% and 48.5% in the June quarter, down sequentially from more than 49%.

Why This Matters

Booming demand from AI data centers has caused the price of memory devices to skyrocket over the past year. That inflation is expected to eventually show up in the price of consumer electronics.

Apple on Thursday reported better-than-expected results on the top and bottom lines, but noted the memory shortage was already pressuring profits. Gross margins on its products declined by two percentage points to 38.7%, “driven by a seasonal loss of leverage and higher memory costs,” said CFO Kevan Parekh. Company-wide margins expanded last quarter, but only because of its services business, where margins exceeded 76%. 

Memory has been one of the hottest commodities in Silicon Valley, and on Wall Street, for the past year due to a supply crunch driven by demand from AI data centers. The hyperscalers—Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Oracle (ORCL)—are expected to spend more than $700 billion on infrastructure this year. Those deep-pocketed tech giants are paying handsome premiums to secure memory, driving up prices.

Flash memory supplier Sandisk (SNDK) on Thursday reported quarterly revenue of $5.95 billion, a 251% increase from the prior year and well over $1 billion more than it forecast early in the quarter. Data center revenue grew 233% from the prior quarter, while gross margins expanded to more than 78% from 51%.

The shortage has made memory stocks some of the market's top performers. Micron (MU) stock is up more than 85% since the start of the year. Western Digital (WDC) and Seagate Technology (STX) have seen their share prices double this year, while Sandisk's has quadrupled.

The data center boom has generated so much demand for memory that it’s rewiring the industry. Sandisk CEO David Goeckler on Thursday said the company has signed multi-year partnerships with five customers needing to secure a consistent supply of memory. “We believe this marks a fundamental evolution of our business,” Goeckler said. 

Cook on Thursday said Apple would “look at a range of options” when considering how to adapt to soaring memory prices. It could strike multi-year contracts with memory suppliers, including Sandisk, Micron, and Samsung. Goeckler on Thursday said Sandisk was in talks with some “edge customers,” which includes PC and smartphone makers, about such deals.

Ultimately, it may be consumers who pay the price. “We expect Apple to raise the [average sales price] of new higher end iPhones (Foldable, ProMax and Pro) introduced this fall,” wrote Bank of America analysts in a note on Friday. “We see the iPhone as a relatively price inelastic product, where a $100 price increase would not materially shift the demand curve but would absorb most of the memory related margin pressure.”

Wall Street's confidence that Apple can defray higher memory costs helped buoy shares on Friday. The stock rose 3.3% to close at a year-to-date high.

Update—May 1, 2026: This story was updated to reflect the market close on Friday.