Investors did not respond nicely to the impact that AI had on memory chip inflation. For a few quarters, both Microsoft (MSFT) and Apple (AAPL) managed to ward off raising prices.
That changed on Thursday.
Although Apple CEO Tim Cook warned about price increases, investors did not expect the size of the increase. The MacBook Neo’s price rises by $100 to $699, while the MacBook Pro’s price jumped from $1,699 to $1,999.
The iPad Air price rises from $599 to $749. Additionally, the HomePod (+$50), HomePod mini (+$30), and Apple TV (+$50) might hurt Apple’s streaming service subscription rates.
AAPL stock fell by 6.12% to close at $275.15.
Even though Xbox is trailing its growth rates of its peers, notably Sony (SONY) and Nintendo (NTDOY), Microsoft raised the prices of the console. It has no choice but to do so, to offset component prices.
MSFT stock fell 3.46% to close at $352.82. The market ruthlessly erased the peak price of over $450, where it started on June 1.
Investors are asking serious questions about its AI investments. A report from The New York Times said that OpenAI would consider delaying its IPO until next year. That is a serious issue: SpaceX (SPCX) beat OpenAI in the IPO race. It secured funds ahead of risks that market liquidity might dry up. A bear market would also weaken OpenAI’s IPO funding efforts.
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