Last week, raised prices on certain products, citing rising costs of AI memory chips. In a statement to Reuters, the company said it had “never seen a component price increase this much, this quickly” and further that it had been shielding customers from higher costs until now. There is a global shortage of memory and storage chips driven by AI data centers buying up DRAM and NAND capacity.
As a consequence, Apple is increasing the MacBook Air price to $1,299 from $1,099, the MacBook Pro to $1,999 from $1,699, and the iPad Air to $749 from $599. Prices of other Apple products will also increase.
Apple is not alone. Dell (NYSE:) raised prices roughly 15% to 20% in late 2025, Lenovo followed in January 2026, and HP, Acer, and ASUS warned of increases. All of them blame the same AI-related memory crunch.
The implication is worth better appreciating. The CPI’s information technology category, including computers, smartphones, and peripherals, has been a persistent deflationary force for decades. That tailwind is now slowing and possibly reversing.
From a Fed perspective, it’s worth noting that higher interest rates cool demand-related inflation but have a much smaller impact on supply-side inflation driven by a shortage of AI memory chips. However, if consumers and businesses are paying more for technology products, they will have less money to spend on other products. The reallocation of spending may offset some of the inflation in AI memory chips.
Time, too, will solve the problem, as both new and existing AI memory chip producers are heavily incentivized to meet the insatiable demand.
Quarter-End Rebalancing Trades In Action
The top two graphics below help illustrate how market breadth has improved over the last few weeks as passive index managers rebalance from stocks that have outperformed the market to those that have underperformed. On a quarter-to-date basis, large-cap growth has beaten large-cap value by over 6%.
While this is a meaningful outperformance, consider that over the month of June, large-cap value beat large-cap growth by about 9% and, in the process, closed what was a much larger performance gap. The graph within the third graphic shows how , the mega-cap growth ETF, rotated from very overbought to oversold in three weeks. At the same time, small caps () and the equal-weighted S&P 500 () moved into overbought territory.
The risk for investors chasing the new outperformers is that the sharp reversal in fortunes over the last few weeks was likely driven by rebalancing trades. It is common for larger rebalancing actions to reverse themselves once a period-end date has elapsed.
Not shown, but regarding the sectors, we now find that the once laggards, health care, financials, and utilities, are overbought, while technology is back to fair value. It’s important to note that over the last month, mega-cap stocks, which include technology giants like , , , and , gave up 3.75% to the .
Chip makers beat the index by nearly 7%. Simply, the weakness in technology is from the largest stocks. Thus, we might expect to see those megacap names outperform in the first week of the new quarter, while semiconductor and hardware stocks give up some of the spectacular gains they earned over the last few months.
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