AAPL Stock Slides Over 6% On Mac And iPad Price Hikes — Why Gene Munster Calls It An ‘Overreaction’
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Gene Munster says the market is overreacting, adding that investors are pricing in exaggerated “demand destruction” concerns.He adds that Apple’s ecosystem lock-in across an estimated 1.5 billion users supports strong pricing power despite the increase.Earlier in the day, Apple hiked MacBook and iPad prices, citing higher memory and storage costs driven by AI demand.Shares of Apple Inc. (AAPL) dropped nearly 6.5% on Thursday afternoon after the company announced price hikes on MacBooks and iPads due to a memory crunch. But according to Deepwater Asset Management’s Gene Munster, the selloff, however, may be running ahead of fundamentals.AAPL Selloff ‘Overreaction,’ Says MunsterMunster said in a post on X, “$AAPL trading down 5% on the news of an average Mac weighted price increase of about 17% (factoring in mix) feels like an overreaction on fears of demand destruction.”He adds that the market is underestimating Apple’s pricing power and ecosystem strength. “My take is for the most part, demand for Apple products are inelastic, that is a large change in price has a smaller change in demand,” Munster wrote, pointing to his estimate of Apple’s 1.5 billion consumers who remain deeply embedded in its ecosystem.AAPL Demand Seen Holding Despite Price HikesAccording to Munster, Apple users continue to derive strong value even after price increases, limiting the risk of meaningful demand erosion. He also highlighted the long replacement cycle for Macs, stating, “Average life of a Mac is 4.5 years before it’s traded in which means a $200 increase adds $3.70 a month to the cost of ownership.”While acknowledging that customers may have to absorb higher upfront costs, Munster suggested behavior is unlikely to change materially. “Rational buyers likely will be frustrated and buy anyway,” he added, highlighting his view that the selloff reflects sentiment rather than fundamentals.AAPL Mac, iPad Prices Jump $100-$300Apple raised prices across its MacBook and iPad lineup on Thursday, citing higher memory and storage costs driven by surging AI demand. CEO Tim Cook said in an interview with The Wall Street Journal that price hikes were becoming unavoidable despite efforts to protect customers. “We’ve been trying to shield our customers from the increases, but the situation has become unsustainable,” Cook said.According to a CNBC report, Apple has increased prices by $100 to $300 across key models.The MacBook Neo now starts at $699, up from $599. The MacBook Air 512GB variant has risen to $1,299 from $1,099, while the MacBook Pro 1TB model saw the sharpest jump, climbing to $1,999 from $1,699.On the tablet side, the iPad Air 128GB is now priced at $749, up from $599. The iPad Pro Wi-Fi model has increased to $1,199 from $999.AAPL Stock: What Stocktwits Retail Sentiment SaysOn Stocktwits, retail sentiment for AAPL improved to ‘neutral’ from ‘bearish’ a week ago, while message volume was ‘normal,’ unchanged in the past 24 hours.AAPL stock is up 0.78% year-to-date. In the same period, the S&P 500 ETF Trust (SPY) has gained 6.5% while the Invesco QQQ Trust (QQQ) has been up 15%. Also See: JPM Stock Gains Nearly 3% — Jamie Dimon Succession Dynamics Shift After Marianne Lake ExitFor updates and corrections, email newsroom[at]stocktwits[dot]com.
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