Apple’s iPhone business is booming. Here’s why the stock is falling anyway.

Apple’s iPhone business is holding up well, with demand for its flagship device remaining strong. Yet the stock has moved lower, a disconnect that highlights how markets weigh future risks against current performance. Two pressures stand out: a worsening memory crunch and a slowing services business.

The memory crunch matters because smartphones depend on memory components, and tighter supply or rising costs can weigh on margins even when unit demand is healthy. For Apple, strong iPhone sales do not automatically translate into proportionally strong profits if component economics shift against it. Meanwhile, services—a segment investors have watched closely for its higher-margin, recurring character—is slowing, tempering a key part of the growth story.

The takeaway is that share prices reflect expectations, not just present demand. What to watch: commentary on memory supply and pricing, and whether services growth stabilizes. Those factors will shape how investors judge Apple’s ability to convert solid hardware demand into durable earnings.