10AM Hour: U.S. Energy Secretary Chris Wright, Apple Raises Prices Due to Memory Crunch, Micron Soars 6/25/26

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You never forget your first fan.

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So how was practice, kiddo?

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Bank of America champions US men's national team member Tyler Adams. And everyone who dares to ask, what would you like the power to do? Bank of America, proud to be the official bank of US soccer and FIFA World Cup 2026 Bank of America NA member FDSE.

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Carl Quintanilla (1:05)

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker, David Faber here at Post 9 of the New York Stock Exchange. Sara Eisen is off. Coming up, Micron shares are higher, but off the opening highs after this blowout quarter, as the memory crunch boosts revenue off the best levels, as we said, and the NASDAQ has given up early gains, now down more than 1%.

We'll talk to the head of Viral DRAM ETF, which counts Micron among the top holdings. Energy Secretary Chris Wright's with us, as oil prices fall close to some pre-war levels, and as the administration marks a milestone around nuclear energy.

And it is one of the final Supreme Court opinion days of the session. We are awaiting a potential decision regarding the president's authority to fire Fed Governor Cook. We'll get you those headlines if and when we get them.

Leslie Picker (1:48)

But let's begin with breaking news this morning on Apple. Shares are getting hit this morning down 4.8% after the company officially raised prices on a number of products due to the skyrocketing costs of memory and storage. Kenzie Sigalos joins us now with more. Hey, Mac.

Mackenzie Segalos (2:03)

Hey, Leslie. So those shares falling this morning as investors digest the company's first real move to pass the AI memory crunch directly onto consumers. The Apple Store is down for nearly an hour this morning as the company re-racked pricing across parts of its MacBook and iPad lineup. The increases are roughly in the range of $100 to $300, depending on the device. So this is not across the board and it is not touching the current iPhone lineup, at least not yet. But it is a clear signal that the cost pressure has finally gotten too big for Apple to fully absorb. The company is saying in a statement this morning that the consumer electronics industry is facing what it referred to as an unprecedented challenge with AI data centers driving an extraordinary surge in demand for memory and storage. Apple also said it has reached a point where it needs to begin raising prices on a number of products, really leaving the door open to more increases down the line. Memory prices have quadrupled in the past three quarters as suppliers shift capacity toward the high bandwidth memory used in AI servers. We heard from Micron last night that it went from a 39 percent gross margin a year ago to 85 percent in its most recent quarter and this is what that looks like on the consumer side. As Deutsche Bank put it, it becomes a tax on devices. Apple explicitly saying today that it held out as long as it could, but with its margin near 50 percent, there's only so much of this memory shock that it can eat if it wants to hold on to that profitability.

Now, for Apple, Mac and iPad are the logical place to start. Together, they're about 14 percent of revenue versus the iPhone at nearly half the business. So this looks like Apple testing pricing power in smaller categories first. Guys?

Leslie Picker (3:42)

Matt, given the stock response here, is there concern you think that these price hikes could lead to demand destruction?

Mackenzie Segalos (3:50)

I think that's exactly what the investor response is so far. Really, this, as I said, is about testing the waters before these price changes hit the iPhone lineup. Analysts who have been tracking this are already breaking down the iPhone 17 Pro during this Bill of Materials math, and if these price hits to memory are incorporated into what they're modeling for with the iPhone 18 Pro, which is expected at their September event, they're modeling for the device to cost $280 more at that Pro level. Already, the smartphone market more broadly is tracking for its worst year on record. Apple has been gaining share because it hasn't hiked prices when names like Samsung, Xiaomi and others are raising their Pro devices by up to 40 percent. Apple hasn't done that, gaining share in China. The concern is that it ultimately will have to, and Tim Cook last week signaling that today, that statement also signaling that price hikes, more of them are coming.