Apple’s stockpiling of its inventory, particularly computer memory, continued during its fiscal fourth quarter, according to results released Monday. The company reported that its inventory increased significantly during the quarter, from $11.09 billion in the third quarter to $14.54 billion in the fourth quarter, a jump of 31.1%. Year-over-year, inventory increased 154.3%, up from $5.72 billion in Q4 2025.
Apple’s forecast of a 45% to 46% gross margin for the December quarter was largely attributed to the impact of rising memory costs. The company reported a gross margin of 47.9% for the September quarter.
“What we’re seeing right now with memory pricing is unprecedented,” Apple CEO John Ternus said, speaking to analysts on the conference call. “As we said earlier in the September quarter, we saw higher memory costs compared to the June quarter, which were partially offset by the benefit of inventory storage and lower costs on certain non-memory components.”
He said 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 Macs and iPads in late June and iPhones in September.
Ternus also said that beyond December, Apple expects memory costs to “continue to increase.”
“As we have said previously, we believe the benefits of carryover inventory over memory will diminish over time,” he noted, adding that the company is increasing its purchases of this key component. “As we work to improve supply, our obligations to purchase manufactured goods increased by $33 billion between June and September, which you will see in our annual filing when it is released tomorrow.”
Apple also invited COO Sabih Khan, who oversees the company’s supply chain and manufacturing, to answer questions about memory. He reiterated the increase in purchasing obligations but did not rule out future price increases on Apple devices.
The company also blamed weak iPad sales during the quarter on supply constraints. The iPad was one of the only product segments not to grow, even as iPhone and Mac sales beat estimates. iPad revenue came in at $6.2 billion, below analysts’ expectations of $6.7 billion. This figure is also down 10% from the previous year.
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