Who pays for the AI boom?
What matters:
- Apple raised Mac and iPad prices up to 25%, the first increase on existing products in years, blaming the memory chip shortage
- Microsoft hiked Xbox prices for the third time since launch as DRAM costs doubled
- Samsung, SK Hynix, and Micron control 95% of the world's DRAM and say supply stays tight into 2028
Thursday showed you the split.
Apple dropped 6.1% after announcing price increases of up to 25% across its Mac and iPad lines. The company pointed directly at the AI data center boom. Data centers now consume roughly 70% of the highest-end DRAM, and the three companies that make it say there is no relief coming before 2028. Apple chose to pass that cost through rather than eat it.
Microsoft did the same thing with Xbox. The console's third price hike since launch went live this week. The company cited component costs. The component in question is memory.
The equipment makers are printing money.
Applied Materials gained 13.4% Thursday. SanDisk rallied 22%. Western Digital rose 5%. Every company that builds the machines or packages the chips needed to expand memory supply is trading near 52-week highs. The demand is structural, not seasonal.
Dell, HP, Acer, and Lenovo have all warned of 15% to 20% PC price increases in the second half of the year. The cost of a base-model laptop with 16 GB of RAM has already risen $100 since January.
The Dow is getting a new member Monday.
Alphabet replaces Verizon in the Dow Jones Industrial Average before Monday's open. It is the first time a company whose primary business is search and advertising will sit in the index. The swap reflects a Dow that has gradually shifted away from old-economy names. Verizon had been a member since 2004.
Thursday's close.
The S&P 500 settled at 7,357, down slightly on the day. The Dow rose to 51,921. The Nasdaq slipped to 25,359, its fourth consecutive losing session. PCE inflation printed at 4.1% headline and 3.4% core, slightly above expectations on core but not enough to change the rate path. Bonds barely moved. The 10-year held near 4.5%.
Gold reclaimed $4,000 after dipping below the level Wednesday. Oil held near recent lows, with WTI below $70 and Brent around $74.
Michigan consumer sentiment lands this morning at 10 AM.
Futures are lower ahead of the open. The answer to the opening question is simple: everyone who buys a device with a memory chip in it.
