Apple stock took a big hit Thursday after the company announced larger-than-expected price increases for MacBooks and iPads. It’s a difficult path, but the tech giants are well-equipped to handle it. The stock fell more than 6% in its worst single session in more than a year as management took the first formal steps to pass on higher memory prices to consumers since outgoing CEO Tim Cook said last week that price increases were “inevitable.” iPhone price changes are expected, but not before the launch event held each fall. Still, no other technology company is better positioned to weather these increases. Apple’s massive size and strong relationships with memory suppliers give it an advantage over its rivals. “Peers will have to raise prices as well, probably even more than Apple, because they don’t have the bargaining power that Apple does to negotiate raw material prices,” Jeff Marks, the club’s director of portfolio analysis, said Thursday. Despite Mr. Cook’s latest warning, investors sold shares worried about slowing sales. “The market is concerned about the potential demand destruction that could result from these price increases,” Jeff added. Price increases ranged from more than 17% to 25% across Macs, iPads, and home devices. Gil Luria of the Davidson DA’s office said the price increase is quite significant and “exceeds the increase in the cost of memory.” For computers, Apple increased the starting price of the MacBook Air 512GB from $1,099 to $1,299, the MacBook Pro 1T from $1,699 to $1,999, and the MacBook Neo from $599 to $699. Other consumer electronics products like the iPad Air 128GB increased in price from $599 to $749, and the iPad Pro Wifi 256GB jumped from $999 to $1,199. “This looks like a very broad-based price increase,” Luria said. He agreed with Jeff, adding: “It’s hard to imagine that wouldn’t have some impact on demand.” Apple isn’t alone. Microsoft announced Thursday that the prices of Xbox game consoles are increasing, due in part to rising memory costs. The club’s stock, Microsoft, fell more than 3.5% on the news, hitting a 52-week low. Adding to concerns was memory giant Micron Technology reporting an impressive quarter. The company also said it expects the difficult situation to continue into the 2027 calendar year and beyond, and does not know when that will change. Micron stock soared 15.8% on Thursday. Other memory and storage companies such as SanDisk and Western Digital also rose significantly. Rising prices threaten to reduce profit margins for Apple and other tech companies unless they act. The capacity to produce memory and storage is dominated by hyperscalers, which require data center-grade chips to support energy-intensive AI workloads. This means that the availability of components in the consumer electronics industry will decrease. As a result, memory and storage prices have quadrupled in the past three quarters, according to data from Counterpoint Research. Going forward, Apple has a clear advantage over its competitors. The first is the size of the company. Suppliers like TSMC prefer Apple’s predictable annual hardware cycles to betting on the production capacity of small tech companies with volatile orders. This allows Apple to lower prices and make initial price cuts on components. Second, Apple has high profit margins, giving it the financial cushion to absorb costs more easily than its peers. Beyond that, iPhone makers also have great relationships with memory suppliers. Management can lock in long-term memory contracts in advance, allowing Apple to secure lower rates before the market spikes. Conclusion Not only is Apple in a strong position to weather the memory shortage, it also has its own tailwinds that will help offset future pressures. Most notably, Apple’s AI roadmap is looking more promising after a lackluster rollout that weighed on the stock through 2025. In 2026, things took a big turn for the better. In January, Apple announced a multi-year partnership with Alphabet to bring Google’s Gemini to power the company’s artificial intelligence capabilities. Apple is expected to pay about $1 billion a year, which pales in comparison to what Google pays Apple for search priority. Apple could also avoid all the billions of dollars that other big tech companies have poured into building AI infrastructure. “This is a great opportunity for them to realize that by making a deal with Gemini, they happened to have the best AI available,” Jim said around the time of the Alphabet deal. We saw it in action six months later at its annual developer conference when Apple announced an improved, more conversational Siri powered by Gemini. The new and improved Siri is scheduled to launch later this year, and after a year of strong sales for the iPhone 17, it’s another selling point for the next iPhone upgrade cycle. “You know, we’re just being patient,” Jeff said. “Clearly, Apple has long been an ‘own, don’t trade’ philosophy.” We give the stock a hold rating of 2 and a $300 price target. With a stock price of around $275, PT suggests an upside of 9%. Apple closed at a record high of $315 on June 2nd. (Jim Cramer Charitable Trust is long AAPL, MSFT, GOOGL. See the complete list of stocks here.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. 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