TLDR
- Apple is testing memory chips from China’s CXMT for use in iPhones and MacBooks
- Apple is seeking White House approval before any deal with CXMT can move forward
- Federal rules block tech-sharing with CXMT, limiting Apple to off-the-shelf purchases only
- Apple stock trades at $313.33, with a consensus “Moderate Buy” rating and $330.44 price target
- Apple reported Q3 revenue of $109.42 billion, up 16.4% year over year, beating estimates
Apple is quietly testing memory chips from Chinese manufacturer CXMT for potential use in iPhones and MacBooks, according to a Wall Street Journal report published Sunday.
The company is in early talks with CXMT about a supply arrangement, but is waiting for White House sign-off before anything moves forward.
Apple’s interest in CXMT comes down to cost. Rising memory prices, driven by heavy AI demand, have pushed the company to raise product prices worldwide. A Chinese supplier could give Apple more pricing leverage.
Federal export rules create a hard limit on how far that relationship can go. U.S. companies are barred from sharing technology with CXMT, which rules out the kind of custom chip development Apple typically does with suppliers like Micron, SK Hynix and Samsung.
What Apple can do is buy off-the-shelf CXMT products and negotiate on price, according to Kevin Wolf, a lawyer at Akin Gump who advises on export controls.
CXMT recently listed on the Shanghai stock exchange and is now mainland China’s most valuable listed company. Its second-quarter revenue came in more than eight times higher than a year earlier.
The Pentagon has placed CXMT on a list of companies it says have ties to China’s military. Some U.S. policymakers are concerned that orders from large American firms would give CXMT capital and indirect access to U.S. expertise.
There is also a practical supply issue. CXMT has maxed out its production capacity for this year and has little room for new international customers. HP and Acer have already secured limited volumes and are working to lock in larger supplies for 2027.
CXMT chip prices are broadly in line with Micron, SK Hynix and Samsung, and sometimes higher, due to tight supply and higher production costs.
Apple’s Recent Earnings
Apple stock opened at $313.33 on Friday. The company reported quarterly EPS of $2.02, beating the $1.89 consensus estimate by $0.13. Revenue came in at $109.42 billion, up 16.4% year over year, and above the $109.04 billion analyst estimate.
The company has a market cap of $4.57 trillion, a P/E ratio of 35.93, and a 12-month price range of $219.25 to $344.57.
Institutional investors hold 67.73% of the stock. Analyst consensus sits at “Moderate Buy” with a $330.44 price target.
JPMorgan trimmed its price target from $345 to $340 but kept an “overweight” rating. Phillip Securities downgraded to “moderate sell” and China Renaissance cut its rating to “hold” with a $280 target.
Leadership Change Ahead
Tim Cook is set to step down in September, with Apple veteran John Ternus lined up to take over as CEO. Cook called Ternus the right person for the role.
Apple also announced a quarterly dividend of $0.27 per share, payable August 13, with a record date of August 10.
Analysts expect full-year EPS of $8.76 for the current fiscal year.
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