Morningstar

Apple: March Releases, Including Brand-New MacBook Neo, Keep Pricing Low Despite Memory Inflation

We believe Apple’s premium prices have built-in buffers for component cost inflation and that it receives best-in-class contract pricing for memory.

An Apple logo adorns the facade of the downtown Brooklyn Apple store.
Kathy Willens via AP
Securities in This Article
Apple Inc
(AAPL)

Key Morningstar Metrics for Apple

  • Fair Value Estimate
    : $260.00
  • Morningstar Rating
    : ★★★
  • Morningstar Economic Moat Rating
    : Wide
  • Morningstar Uncertainty Rating
    : Medium

Apple AAPL unveiled a slew of new products during the week of March 2, highlighted by the brand-new MacBook Neo. Other releases included updated iterations, such as the iPhone 17e, new M5-series chips in MacBooks, a new iPad Air with an updated M4 chip, and new Studio displays.

Why it matters: For the most part, these updates were evolutionary. We note a heavy emphasis on AI readiness across all product releases, and that Apple refrained from raising prices across the lineup. We remain impressed by the firm’s product and silicon ecosystem, with tight software integration.

  • Despite skyrocketing memory chip prices, Apple kept prices constant across Mac and iPad, consistent with the iPhone 17 family. We like Apple absorbing memory prices, and we believe the firm is adept at negotiating a ballooning pricing environment while maintaining a strong margin.
  • New products include updated processors, along with connectivity chips like N1 (Wi-Fi and Bluetooth) and C1X (cellular). Vertically integrated silicon design helps Apple keep prices down, raise margins, and develop more tightly integrated software and hardware.

The bottom line: We maintain our $260 fair value estimate for wide-moat Apple, as evolutionary updates align with our pricing expectations and reinforce our view of Apple’s strong product lineup. Shares look fairly valued and didn’t move much on releases.

  • We expect Apple to continue expanding margins, even amid tariffs and memory cost pressures. We believe Apple’s premium prices have built-in buffers for component cost inflation and that it receives best-in-class contract pricing for memory, well below astronomical spot prices.
  • Apple has lowered inflation-indexed prices by close to 20% since 2020, while expanding gross margin by more than 800 basis points. We credit best-in-class supply chain management and continued vertical integration for Apple’s margin performance.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Sponsor Center