Apple stock gets slammed on bigger Mac, iPad price hikes. Why it can weather the storm

Breaking news from the markets: Apple shares took a big hit Thursday after the company announced bigger-than-expected price hikes on its MacBooks and iPads. It's a bump in the road — but one that the tech giant is well-equipped to handle. The stock had its worst single session in more than a year, falling more than 6%, as management made its first official move to pass higher memory costs onto consumers since outgoing CEO Tim Cook said that price increases were "unavoidable" last week.

Price changes on iPhones are expected, but not before the annual fall launch event. Still, no tech company is in a better spot to navigate these increases. Apple's massive scale and strong relationships with memory suppliers give it an edge over rivals.

Economic Details

"I would think their peers would need to raise prices as well, probably even more than Apple because they just don't have the bargaining power to negotiate input prices as Apple has," Jeff Marks, director of Club portfolio analysis, said Thursday. Despite Cook's recent warning, investors sold the stock on concerns about a sales slowdown. " market is worried about the potential demand destruction that could come as a result of these higher prices," Jeff added.

The price increases ranged from over 17% to 25% across Macs, iPads, and home devices. Davidson's Gil Luria described the price increases as quite substantial and "beyond the increased cost of memory. " In personal computers, Apple raised the MacBook Air 512GB to $1,299 from $1,099, the MacBook Pro 1T to $1,999 from $1,699, and the starting price for the MacBook Neo to $699 from $599.

Other consumer electronics like the iPad Air 128GB went to $749 from $599, while the iPad Pro Wifi 256GB jumped to $1,199 from $999. "It looks like this is a very broad price increase," Luria said. He agreed with Jeff, adding that it's "hard to see how that wouldn't impact demand somewhat.

Analyst Views

" Apple is not alone. Microsoft announced on Thursday that prices are increasing on its Xbox game consoles, also citing higher memory costs. Club stock Microsoft fell more than 3.

5% on the news, hitting a 52-week low. Adding to the concern, memory giant Micron Technology reported a monster quarter. The company also said it expects tight conditions to persist beyond calendar year 2027, and it is not sure when that will change.

Micron shares soared 15. Other memory and storage companies, such as Sandisk and Western Digital , were also up big. Surging prices have required Apple and other tech companies to take action, or risk hits to profit margins.

Financial markets are tracking the development closely as investors assess the likely impact.