Richard Fogler Apple Inc AAPL-Q DON'T BUY May 01, 2025

They do gross margins very well, but revenues are in the single digits at best while iPhone sales are down YOY. And it trades at 28x. There are better Mag 7 stocks.

This is thuggish behaviour with Trump telling Apple, "Pay up." And now the negotiation comes. Tim Cook will have to pay it, whether through lower gross margins for example. Remember that Trump needs to pay for the tax cuts he just passed. The world knows now that the U.S. won't cut spending, and Trump needs to find money--squeezing everybody he can squeeze. Expectations needs to decline for Apple. In recent years, Apple's growth has slowed and their AI hasn't come out as hoped (and they may not get AI right), but as the US market goes, so will Apple. That said, the difference is Apple's services which boasts wide margins, and Apple has a history of catching up the latest innovations. When money flows into markets, it flows into Apple.

We have to continue to expect this volatility for 3 years, and at least into the summer. You can play this volatility by buying the dips and selling calls. Hold Apple. It won't skyrocket in the next few days. He's more worried about chatGPT's next generation building hardware that surpasses the iPhone. 

Those holding it in a taxable account don't want to sell Apple now, so will hold. And no, Apple will not trade in line with the S&P (it's been underperforming the market).

Supply chains and labour costs. Moving from China to India will still not appease the president. It would take years, not months. iPhone prices would increase substantially. More like a consumer stock, and not introducing anything new to the market. Money from services starting to ebb, margins declining. Fallen 30% from highs last year.

Not a Mag 7 that's in favour right now.

Sentiment is so poor on the stock right now. But he's looking forward. Excited by unleashing AI into its products, when we'll have agents like Siri doing a lot of things for us. Closed system with 1.1B users, and it'll sell them more products and services over time. One of the best businesses in the world, generates lots of FCF. Valuation is as attractive as it's been in a long time. Yield is 0.51%.

Doesn't mind nibbling here around $200. Lots of moving parts, and no one knows exactly how they'll play out. It is a laggard. Support is around $190-200. If you buy here, and it goes 5-10% lower, he'd look to exit. But if it pushes higher, and you're up 10%, he doesn't mind adding more.

Monday they host a Worldwide Developer's Conference and some have bid on the stock today based on that, up 1.64%. However, Trump wants Apple to build iPhones in the US, which is a serious problem and make Apple hard to own. However, maybe Apple can catch a break now that Elon Musk is drawing so much fire.

They held their developer's conference today, with no big news. As long as you didn't hear "switch" from that conference, then hold onto Apple. This has been dowgraded, but he thinks that downside will be limited. He's long been a believer in this name. The company has been in a dry spell, offering no new products, but it can always buy another company. Also, Apple could lose the Google or Epic case, but likely not both. Also, Apple never stands still; the CEO has been busy dealing with Trump (i.e. shifting production from China to India).

It is a great brand but does not have enough of a margin of safety for him since it trades near 30X forward earnings. Most earnings come from the sale of hardware and there is not a lot of margin in this. Also tariffs could have a big effect. It has other parts as well.