Apple shares fell sharply Thursday after the tech giant raised prices on a number of its signature products to make up for what it said were skyrocketing memory prices resulting from the AI boom.

As of 2:00 p.m. ET, Apple stock was down by nearly 6%, putting the company on track for its worst one-day performance in more than a year, and wiping out about $250 billion worth of market value.

The company had announced that prices for its MacBook Neo, MacBook Air, iMac, and iPad product lines would all rise, in some cases by as much as $200.

The prices of the iPhone, Apple Watch and AirPods were not impacted.

“The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage,” the company told NBC News in a statement. “We have never seen a component price increase this much, this quickly.”

The company said it had “shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac.”

Apple said it was “working tirelessly to find solutions.” The price increases took effect immediately and were already listed at Apple’s online store at midday on Thursday.

Last week, Apple CEO Tim Cook told The Wall Street Journal that “price increases are unavoidable” given the memory crunch. “We’re doing our best to mitigate the huge increases that are being passed to us,” Cook told the paper.

Apple is far from the only tech giant under pressure from the rising cost of chips capable of storing all the data required to operate today’s cutting edge consumer products.

Microsoft’s Xbox division said Thursday it was raising prices by $100 for some models and $150 for higher-memory capacity models.

“Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027,” the company said.

The memory market is dominated by a small number of companies: South Korea’s Samsung and SK Hynix, Japan’s Kioxia and two American firms, Micron Technology and Sandisk.

Given the small number of companies that manufacture these two different types of memory and the expansive buildout of AI data centers around the world, supply is extremely tight, leading to surging prices.

Apple called the memory shortage “an unprecedented challenge” for the company.

The price of Apple’s MacBook Neo rose $100, while the price of its 13-inch MacBook Air jumped $200.

The price of Apple’s iPad that has an 11-inch screen rose $150, while the most basic iPad model’s price rose $100.

The price of an Apple TV streaming media box rose by $70, to $199.

The moves shocked longtime followers of the company, because Apple has rarely hiked prices overnight like this without introducing new features or a new model.

“The price hikes across the select products come as a surprise, as we were under the impression that Apple would wait until the next product cycle before raising prices,” Evercore analyst Amit Daryanani wrote in a note to clients.

“The increases were broad-based and ranging from +17% to +25% across the core Mac/iPad lineup on base-model configs, with larger percentage increases on smaller-ticket home devices, including Apple TV at +54%,” Daryanani noted.

“While higher memory prices have already been well understood, today’s intra-cycle price hike suggests that the magnitude and pace of the cost pressure exceeded Apple’s ability to absorb it,” he added. “Today’s move is a clear signal that memory inflation is biting harder and faster than expected, even for Apple.”

JPMorgan Chase analysts wrote in a note on Thursday that “the magnitude of the [price] increase on the announced [products] is higher than we anticipated.” They also predicted that the higher it prices could hurt sales.

The price hikes announced Thursday did not extend to Apple’s cornerstone product, the iPhone. Already, the base iPhone 17 costs $799.