BofA sees $200 iPhone Pro price hike after Cook warns costs are ‘unsustainable’

Bank of America Reiterates Apple Buy Rating, Raises iPhone Pricing Assumptions After Cook Warns of Price Hikes

Bank of America analyst Wamsi Mohan maintained a Buy rating on Apple with a $380 price target on Thursday, raising pricing assumptions for the iPhone Pro and Pro Max models by an additional $100 after CEO Tim Cook warned that product price increases are “unavoidable” due to surging memory chip costs.

Cook’s Warning Triggers Estimate Revisions

The BofA note followed an exclusive interview Cook gave to The Wall Street Journal on Wednesday in which the outgoing CEO said the company could no longer shield customers from rising component costs. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable,” Cook said.wsj

BofA had already built a $100 price increase into its iPhone Pro estimates prior to Cook’s comments. The additional $100 adjustment brings the firm’s total anticipated price hike for the higher-end models to $200, while pricing assumptions for the base iPhone model and iPad Air remain unchanged. The firm also factored pricing increases into Mac and iPad categories, according to Benzinga.yahoo

Modest Revenue and EPS Adjustments

The updated assumptions led BofA to nudge its fiscal 2026 revenue estimate to $469.8 billion, up from $468.7 billion, with earnings per share moving to $8.63 from $8.61. The $380 price target, first set on May 26 when Mohan cited the potential of “agentic AI” as a long-term revenue driver, is based on a 37-times multiple of projected calendar year 2027 earnings of $10.27 per share.appleinsider

Memory Crisis Fuels Industry-Wide Price Pressure

The backdrop for Apple’s pricing dilemma is a broader memory chip crunch driven by insatiable demand from artificial intelligence workloads. The price of RAM has more than doubled since October 2025, according to the BBC, and disruptions in the global helium supply tied to the conflict in Iran have further strained semiconductor production. Research firm Omdia projects the average global selling price of smartphones will rise roughly 20% in 2026.bbc

Apple shares were up modestly on Thursday afternoon following the note.benzinga