Apple beat on revenue, beat on profit, sold more iPhones and Macs — and the stock fell anyway. The reason: a warning that holiday-quarter margins will shrink because of memory chips. Palantir ran the same play. Welcome to a market where “better than expected” no longer means “good.”
Why it matters: The AI boom is starting to send its bills to companies that supposedly weren’t part of it — and, eventually, to the people who buy their products.
The big picture
- Apple shares fell about 4% premarket Tuesday despite revenue ($114.48B) and EPS ($2.10) above forecasts.
- The culprit: holiday-quarter gross margin guidance of 45–46%, vs. 47.9% last quarter — blamed on rising memory prices and Siri AI costs.
- Palantir topped $2B in quarterly revenue for the first time (+96%), yet its stock was down about 6.6% premarket as of 9:05 a.m. ET as new-contract growth slowed.
- The Nasdaq 100 entered correction territory Monday.
Apple: a record year, a worrying outlook
It’s Apple’s first report under new CEO John Ternus, who replaced Tim Cook in September. Per Reuters (LSEG):
| Metric (fiscal Q4) | Actual | Expected |
|---|---|---|
| Revenue | $114.48B | $113.39B |
| EPS | $2.10 | $1.99 |
| iPhone | $57.58B | $56.54B |
| Mac | $10.79B | $9.61B |
| Services | $31.57B | $31.58B |
| Greater China | $17.54B | $18.58B |
| Gross margin | 47.9% | 47.5% |
On the call, CFO Kevan Parekh said memory prices will keep rising next year. December-quarter margin guidance: 45–46%, vs. expectations around 47% (Investing.com). Services growth is guided at 8–9% vs. the 10.7% analysts expected. Shares fell 4% during the call, recovered some by evening, and per CNBC were again down about 4% Tuesday morning.
Two more details: Apple plans to raise iCloud+ prices to cover AI costs and to cap server-powered features, including Siri AI. And the foldable iPhone Duo is supply-constrained; Ternus said he can’t predict when supply will catch up with demand.
Between the lines: memory, AI and irony
The logic is simple and a little ironic. AI data centers are buying up memory chips in enormous volumes, memory gets pricier, and that hits makers of ordinary phones and laptops. Per Reuters, Apple has already raised the iPhone 17 price by $100 and some MacBook prices, and its purchase commitments rose $33B in the quarter. Shares of memory maker Micron actually ticked up after Apple’s report.
So Apple — which investors treated as a “safe haven” from the AI boom (the stock is up roughly 24–25% this year) — is paying for that boom out of its own margin.
Palantir: revenue nearly doubled, stock down
Palantir’s numbers were even flashier: EPS of $0.44, revenue up 96% to $2.31B, Q4 guidance of $2.649–2.653B, above expectations. For the first time, US commercial revenue exceeded government revenue (CNBC).
Yes, but: the market looks ahead. Total contract value (TCV) rose only 6% year over year, vs. 49% the prior quarter (Investing.com). William Blair called it “another impressive” report but warned of a “muted” reaction. “Muted” turned out like this: as of 9:05 a.m. ET, Palantir traded at $166.53 premarket, 6.6% below Monday’s $178.34 close (Yahoo Finance), in line with the 6.5% drop CNBC reported. Earlier in the morning, per MarketWatch, it was down as much as 8%, at $164.05.
Note: TCV figures are from Investing.com; CNBC cites Piper Sandler on 11% growth in US commercial TCV — a different metric.
The big picture for your portfolio
It’s bigger than two companies. Per Saxo, the Nasdaq 100 fell 1.4% Monday into a correction, and Oracle lost 8.8% on plans to raise $20B in debt and equity. “Will the trillions poured into AI pay off?” is no longer a theoretical question.
If your 401(k) or IRA holds S&P 500 or Nasdaq index funds, you already own Apple, Nvidia and the rest of that crowd. A slide in megacap tech isn’t someone else’s story — it’s your retirement account.
Our view
We think Apple’s report is a good example of the AI boom billing people who don’t think they’re in it. Memory gets pricier, so phones and subscriptions get pricier, so in the end the customer pays. Palantir shows the flip side: when a stock is priced like “the future of humanity,” even nearly doubling revenue won’t save it at the first sign of slowing. We don’t give investment advice, but one morning isn’t a reason to panic. It is a reason to check whether your portfolio leans too hard on a handful of tech giants.
What’s next
- Watch whether Apple recovers after the open or extends the premarket loss.
- Memory prices: Apple’s CFO expects them to keep rising next year.
- Watch for details on the planned iCloud+ price increase and caps on server-powered AI features.
FAQ
Why is Apple stock falling? Apple beat forecasts but expects gross margin to drop to 45–46% in the holiday quarter because of rising memory costs and Siri AI expenses.
Why did Palantir fall with 96% revenue growth? Investors were spooked by a sharp slowdown in new contract value (TCV) growth — from 49% to 6% year over year.
Will iPhones and other devices cost more? Apple has already raised prices on the iPhone 17 and some MacBooks and plans to raise iCloud+ prices. Its CFO expects memory prices to keep climbing next year.
Read also
- Election Day Markets: Wall Street Holds Its Breath, Oil Slides Again Despite US Strikes on Iran
- US Inflation Goes to the Polls: What Got More Expensive and Who’s Paying
Sources
- Reuters (via StreetInsider) — Apple forecasts margin drop in holiday quarter as rising memory costs bite (Nov. 2, 2026)
- CNBC — Apple shares slide after weak margin outlook; Palantir slumps after earnings (Nov. 3, 2026)
- Yahoo Finance — Palantir Technologies (PLTR) quote, premarket, 9:05 a.m. ET (Nov. 3, 2026)
- Investing.com — Apple, Palantir report; U.S. midterm elections ahead (Nov. 3, 2026)
- Dow Jones via Morningstar — North American Morning Briefing (Nov. 3, 2026)
- Saxo — Market Quick Take (Nov. 3, 2026)
By Sergey Danilov, American Panorama. This is not investment advice.
Leave a Reply