Opinion: Micron's Earnings Beat Expectations, but Price Hikes from Apple and Microsoft Could Shift Market Sentiment from 'Embracing Price Increases' to 'Concerns about Demand Destruction'
BlockBeats News, June 26th - Today, the market's sell-off of AI and storage stocks is being explained by a new narrative: the true trigger for the sentiment reversal was not Micron's poor earnings report, but rather the price hikes initiated by tech giants such as Apple and Microsoft.
It is reported that on June 25th, Apple raised prices on multiple Mac and iPad models by approximately 15%-25%, citing a significant increase in the prices of memory and storage chips such as DRAM and NAND due to the surge in demand from AI data centers. Microsoft also announced price increases for Xbox consoles starting from August 1st, with the 512GB and 1TB models seeing price hikes of $100 and $150 respectively, attributing the reasons similarly to the soaring costs of storage and memory.
This viewpoint has already emerged in discussions among overseas media and some market participants. Business Insider referred to Apple's price hike as "wiping out the tech stock rebound triggered by Micron's earnings report," and Futurum CEO Daniel Newman also mentioned that Apple's price hike made the market realize that the increase in storage prices has shifted from upstream profits to consumer costs.
If only Micron's earnings report were considered, the market should have been more optimistic. Micron's revenue and profit far exceeded expectations, indicating that the demand for storage in AI is still strong, and HBM, DRAM, and NAND have not entered a demand collapse phase. In other words, Micron's earnings report proves that the AI hardware cycle is still ongoing, even hotter than the market expected. However, the price hikes by Apple and Microsoft changed the market's interpretation.
In the past, the increase in storage prices was mainly seen as a boon for upstream companies. The fact that Micron, Samsung, and SK Hynix could raise prices indicated supply shortages, showed that AI data centers are still expanding, and demonstrated that profits would continue to flow to the hardware end. But when end-user giants like Apple and Microsoft also begin to pass on costs to consumers, what the market sees is not just "upstream profit-taking" but rather "downstream starting to struggle."
The viewpoint holds that high profits for storage manufacturers per se are not an issue, but if these profits come from persistently squeezing the downstream, then application providers, end-user hardware manufacturers, and consumers will all ultimately bear the costs. Apple's price hike indicates that high storage costs are no longer just an internal financial issue within the supply chain but are beginning to affect product prices. Microsoft's price hike also indicates that this pressure is not limited to a single company but is a challenge faced by the entire consumer electronics and AI hardware ecosystem.
What the market is concerned about is not the price hike itself, but the demand disruption after the hike. Can consumers accept more expensive computers, tablets, consoles, and AI services? Can app companies continue to expand under higher computing costs? Can cloud providers turn capital expenditures into a high enough income? Once these questions become a reality, the logic of storage stocks will shift from "benefiting from price hikes" to "suffering backlash from price hikes."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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