Pakistan, Nov. 3 -- Apple shares dropped around 4% in premarket trading on Tuesday after the company warned that rising memory prices could reduce profit margins. The warning raised investor concerns about supply-chain pressures and growing expenses linked to artificial intelligence. Chief Executive John Ternus described the memory-pricing situation as unprecedented during his first earnings report on Monday. He also cautioned that these costs could continue increasing beyond the December quarter.

The iPhone maker has benefited from memory supplies purchased at lower prices, but that advantage is gradually fading. As existing stocks run down, Apple will face greater exposure to higher memory prices. The company reported a gross margin of...