11AM Hour: Squawk on the Street 6/25/26

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Carl Quintanilla (1:05)

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker here at Post 9 of the New York Stock Exchange. Sara Eisen has the morning off. Today, this memory and supply crunch definitely hitting shares of Apple sharply lower as they now hike some prices and hint of more to come while shares of Micron rally after a blowout quarter and says supply will remain constrained through next year.

Leslie Picker (1:25)

And oil prices hovering near pre-war levels as more tankers transit the Strait of Hormuz. Chevron, responding to President Trump's gas price gouging inquiry, telling CNBC that prices will normalize, but, quote, it's going to take time.

Carl Quintanilla (1:39)

Open AI and Anthropic Racing to go public, but could signs of a fading premium in AI pricing be driving those moves? We will try to explain. Meantime, really fascinating session today. Had a nice open on the NAS, then dropped a percent plus, now trying to get some back.

Thank you to Caterpillar and Goldman, though, with the Dow with an all-time high at 52, almost to 52.5.

Leslie Picker (2:01)

Let's get to Apple, though. Moving lower as the company announces price hikes for some products, Mackenzie Segalos has the latest Mac.

Mackenzie Segalos (2:09)

So, Leslie, that June slide is getting worse this morning because investors are reading today's Mac and iPad price hikes as the start of a much broader repricing across Apple's product lineup and not a one-off. Apple had been one of the longest holdouts on memory-related cost increases, helped by long-term deals, existing inventory, and the kind of supply chain leverage that CEO Tim Cook is known for. But AI data centers are now soaking up so much memory and storage that prices have forexed in the last three quarters. Apple now saying it can't shield customers any longer, especially not if it wants to keep its margins near 50 percent. Now the leverage, it has also shifted. Apple's go-to memory suppliers now have massive demand from hyperscaler customers, weakening Apple's hand, and that's part of why the company has been exploring alternatives including Chinese memory makers.

Now, today's increases, they're in the range of $100 to $300 across parts of the Mac and iPad lineup, including the MacBook Neo, which is that lower cost laptop spearheaded by incoming CEO John Ternes, that's become a big seller for Apple. The company starting here for a reason. Mac and iPad are meaningful categories, but together they're only about 14 percent of sales. iPhone is closer to half the business, and that sets up September as the real test. Apple is expected to launch its next iPhone lineup. More than half of iPhone ships since 2022 will not be able to run the full new Siri AI experience, according to IDC. So Apple has a reason to push a hardware upgrade cycle and potentially frame higher prices around more capable AI devices.

Guys?

Carl Quintanilla (3:47)

It's an important story. It's a big move on Apple. I'm glad we led the hour with that, Mackenzie Segalos. Meantime, Micron is surging on that blowout number. Qualcomm as well rallying on its own bullish forecast. Let's get to Christina Parts and Evalos tracking both of those names. This memory story, KP, is kind of turning into a zero sum game for some.

Christina Pareya (4:06)

Yeah.

I guess the winner would be Micron. Memory just has always been this boom and then bust cycle. So many people have PTSD about it, but Micron says, that's over. The reason is contracts. About 40 percent of revenue for Micron is going to come from customers locked into fixed prices or price ceilings just near today's levels with a floor that keeps margins above any past peak. And margins right now are almost at 85 percent. UBS says this floor is set so low, customers can't walk away until 2029 or 2030, which gives us that visibility into the future. There's another long-term piece too. Micron is sold out today. Four new fabs are expected to come online just over the next two plus years or so. And normally, more supply would mean lower prices, but not this time according to them. That capacity is built against demand already locked in, and that means that customers are going to keep paying over the next three to five years. That's why price targets are jumping across the board.