Story
Apple's Purchase Commitments Jump 28%, Signaling iPhone Production Ramp, BofA Says
Apple's manufacturing purchase commitments surged in the fiscal third quarter, a move Bank of America analysts interpret as a strong signal that the company is ramping up for a new iPhone launch and securing key components.
Commitments Point to Production Increase
In a research note, Bank of America analyst Wamsi Mohan highlighted that Apple's purchase commitments rose 28% quarter-over-quarter to $57 billion, up from $44.6 billion in the prior quarter. This increase significantly outpaces the flat reading in the March quarter and the 15% and 12% sequential gains seen in the same period of the previous two years.
Mohan suggests the outsized increase is "potentially due to Apple buying components (including memory) to ensure supply and protect itself from higher prices." The bank expects these commitments to continue rising into the fourth quarter as Apple builds inventory for its next-generation smartphones.
New Supply Chain Risks Disclosed
Coinciding with this spending increase, Apple has added a new risk factor to its disclosures, flagging its exposure to component availability. The company specifically cited "industry-wide supply shortages and cost inflation" for advanced semiconductors, NAND, and DRAM memory.
AdApple also warned that constrained access to high-performance computing could potentially delay the rollout of new artificial intelligence features. The company noted that its own pricing actions may not be sufficient to fully offset the impact of these supply chain pressures.
Analyst Outlook
Bank of America reiterated its Buy rating on Apple stock with a $380 price target. The firm's positive stance is based on several factors, including:
- Strong Capital Returns: Apple returned over $29.8 billion to shareholders in the quarter, consisting of $25.8 billion in share buybacks and $4 billion in dividends.
- AI Positioning: A belief that Apple will be an "eventual winner on AI at the edge."
- New Products: Optionality and growth potential from new product categories.
Read next
More on Stocks
FTC Orders Walmart, Uber, Delta to Disclose Data on Personalized Pricing
The U.S. Federal Trade Commission is demanding nine major companies, including leading retail, travel, and gig economy firms, to provide information on how they use consumer data for setting individual prices and wages.
Google Launches Gemini 4 Carbon AI Model to Bolster Cybersecurity Capabilities
Alphabet's Google has unveiled Gemini 4 Carbon, its latest AI model specifically designed for advanced cybersecurity tasks like vulnerability detection and secure code generation. The launch escalates competition with rivals OpenAI and Anthropic in the enterprise AI market.
Oracle Shares Surge After Unveiling $225 Billion Revenue Target for 2030
Oracle stock rose sharply after the company presented a long-term financial outlook targeting at least $225 billion in annual revenue by fiscal 2030, driven by its expanding AI infrastructure business.
DOJ Scrutinizes Nvidia's $12.9B Hugging Face Deal Amid Broader Antitrust Probe, Sources Say
The U.S. Department of Justice is reportedly examining Nvidia's planned $12.93 billion acquisition of AI platform Hugging Face as part of a wider, ongoing antitrust investigation into the chipmaker's market conduct.