Apple Has $89.7 Billion in Purchase Obligations, and Most of It Comes Due Within a Year
Apple just locked in a staggering wall of purchase commitments with its manufacturing partners, and nearly all of it comes due before next fall. With margins already sliding and memory costs still climbing, the question is whether Apple secured a…
Apple (NASDAQ:AAPL | AAPL Price Prediction) filed its fiscal 2026 annual report on November 3, 2026, and the report shows the company has promised its manufacturing partners $89.7 billion in future purchases. A year earlier, the figure was $56.2 billion.
By our math, that’s an increase of about 60%, and $82.7 billion of the total is payable within 12 months.
Apple shares fell 1.9% on November 3 to close at $331.90, which left the company with a market value of $4.84 trillion. They slid again to $329.80 after hours.
Apple can easily pay these bills. The harder question is what it costs to lock in parts while memory prices are climbing, because that cost hits gross margin before it shows up anywhere else.
What Apple Has Promised to Buy
Manufacturing purchase obligations are amounts owed to the outsourcing partners that build subassemblies and handle final assembly and testing, plus components bought from many suppliers. Apple pays them as parts and services are delivered. Apple does not say how much of this is memory, and it named no suppliers and disclosed no contract terms.
Nearly all of the increase came in a single quarter. The total stood at $57.0 billion in June, so the filings show a $32.7 billion jump by September, which executives rounded to $33 billion on the November 2 earnings call.
Memory Prices Are Driving the Scramble
The 10-K says Apple “is experiencing supply constraints and rising costs driven by industry-wide supply-demand imbalances for key components, including advanced semiconductors, memory and storage,” and expects those trends to worsen for memory and storage.
On the call, CEO John Ternus called memory pricing “unprecedented”. He said, “looking beyond the December quarter, we see the pricing for memory purchases continuing to increase.”
CFO Kevan Parekh guided December-quarter gross margin to between 45% and 46%, down from 47.9% in September. He pointed mainly to memory costs, plus the Siri AI ramp.
The amount due beyond 12 months rose to $7.0 billion from $0.8 billion. Even so, the share due within a year fell to about 92% from about 98.6%, by our math. Asked about long-term memory agreements, COO Sabih Khan pointed only to the higher obligations.
Parts on the Shelf and Cash to Cover Them
Inventory rose 154.3% to $14,541 million. Components jumped to $10,447 million from $2,124 million, while finished goods moved only to $4,094 million from $3,594 million, so the increase is parts for devices Apple expects to sell.
Demand supports that reading. Greater China net sales grew 28% to $82,378 million, driven mainly by iPhone and Mac.
To give a sense of scale, the obligations run about 9.9 times fiscal 2026 capital spending, by our math. Apple ended the year with $136.9 billion in cash and marketable securities, even after $85.8 billion in buybacks (per its management discussion) and $15.7 billion in dividends.
Why Apple’s Margins Matter at This Valuation
At this price, Apple’s main concern is margins. The stock trades at 43 times trailing earnings while management guides margins lower and expects memory costs to keep rising.
Locking up supply helps when rivals can’t get parts. But if memory prices fall while Apple is still paying for commitments made near the peak, margins could come under further pressure. Because the terms were not disclosed, that remains a risk to monitor.
The supplier side of this shortage shows where the pricing power currently sits. Micron Technology (NASDAQ:MU) reported fiscal 2026 revenue of $133.188 billion and a fourth-quarter non-GAAP gross margin of 87.0%, and it guided next-quarter revenue to $61.5 billion. The memory squeeze on Apple is really the AI data-center expansion reaching into the consumer supply chain, and we featured seven companies feeding that expansion in a free report on AI infrastructure suppliers.
The test is Apple’s December-quarter report. A gross margin below 45%, or obligations still rising in the next 10-Q, would confirm that margin pressure is building. Before that, Apple pays the $0.27 dividend on November 16 to holders of record on November 12.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
