- President Trump marries Apple and Intel for chip manufacturing
- Apple calls out soaring memory costs as trigger for price hikes
- Micron rises to fresh all-time highs
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“The Apple and Intel tie-up is a welcome credibility boost for Intel, but investors should keep the scale in perspective. President Trump said Apple has agreed to work with Intel to design and build chips in America, adding weight to months of speculation. But this is unlikely to mean iPhone chips suddenly moving away from TSMC. The more likely starting point is lower-volume, lower-risk parts, potentially in Apple’s PC line-up. Even a decent slice of Apple PC chip volumes would only be a small earnings boost for Intel, so this looks more like proof of concept than a game-changer for now.
Apple price hikes are not a shock either. Markets had already been braced for higher iPhone prices this year, possibly around 10%, and the final move may come in a little softer than feared. Apple has more pricing power than most, with arguably the best brand on the planet, so higher prices may cause some grumbling without any major hit to demand.
The memory space is the read-across. Tim Cook flagged supply issues as a key pressure point, helping push memory stocks higher, with Micron reaching fresh all-time highs. We still think this memory cycle could run for longer than usual, helped by stronger, more structural demand. The caution is that memory stocks often look optically cheap near the strongest point in the cycle, but if AI has changed the shape of demand, it may be too early to ditch the higher-quality names just yet.”
The author holds shares in Micron.
