Apple’s stockpiling of inventory, particularly computer memory, continued in its fiscal fourth-quarter, according to earnings reported Monday. The company reported that its inventory increased significantly in the quarter, growing from $11.09 billion in Q3 to $14.54 billion in Q4, a jump of 31.1%. Year-over-year, inventory grew 154.3% from $5.72 billion in the fourth quarter of 2025.
Apple’s forecast of a 45% to 46% gross margin in the December quarter was largely attributed to the impact of higher memory costs. The company reported a gross margin of 47.9% for the September quarter.
“What we’re seeing with memory pricing right now is unprecedented,” said Apple CEO John Ternus, speaking to analysts on the call. “As we said earlier in the September quarter, we did see higher memory costs as compared to the June quarter, which were partly offset by the benefit of carrying inventory and lower costs on certain non-memory components.”
He said that the company expected “even higher memory costs” in the December quarter, which would be partially offset by price increases implemented earlier this year on some devices, including Mac and iPad at the end of June and iPhones in September.
Ternus also said that beyond December, Apple expects memory costs “continuing to increase.”
“As we said before, we do believe we’ll see a decreasing benefit from the carry-in inventory on memory over time,” he noted, adding that the company was increasing its purchases of this key component. “As we work to improve supply, our manufacturing purchase obligations have increased by 33 billion dollars from June to the September quarter, which you’ll see in our annual filing when it comes out tomorrow.”
Apple also brought COO Sabih Khan, who oversees the company’s supply chain and manufacturing, onto the call to address questions about memory. He reiterated the increased purchase obligations but did not rule out future price increases on Apple devices.
The company also blamed supply constraints for weak iPad sales in the quarter. The iPad was one of the only product segments that didn’t grow, even as iPhone and Mac sales beat estimates. iPad revenue was $6.2 billion, below analysts’ expectations of $6.7 billion. The figure was also down 10% from the prior year.
