Apple Inc (AAPL)

It was important that this week Apple held support (October's low) of $168. But given the overall market this week, he won't invest in this or other stocks. He expects the market to fall 4-5% in the short term.

Has pulled back recently for good reason: more competition and less demand in China, less demand overall for iPhones and an unknown AI strategy. Also the PE got too high. But these are short-term concerns. The DOJ lawsuit adds more scrutiny, but that suit states that 98% of iPhone users re-purchase the phone, and young people want to buy those phones. A fine business. The bad news is priced in. He looks forward to June when Apple announces AI technology, and September for the iPhone launch. Lots of share buybacks and strong balance sheet. Loves it.

He never wanted them to do a car, tough business, often go bankrupt. He's not sure if robotic vacuums are going to reinvigorate the company. iPhone numbers are not good. But if start to see new AI-powered phones, could be a huge catalyst for a refresh. Good, long-term name. Will get through its issues.

Could fall to $160. Apple suffers many problems. The street sees no growth or down revenues; iPhone sales in China were -17% in February; an inventory bubble is developing in phones; trades at a high 25x earnings. Possible positives include the June developers' conference where we might hear of a new Apple product and maybe management will embrace Jensen Huang's vision of the VisionPro as a product for enterprise, not just consumers. If Nvidia does strike a deal with Apple, Apple could become a screaming buy. He still says own, don't trade, Apple--a short-term loser, but long-term winner.

The chart is trending sideways since last June so it's not a good time to enter this. Apple is not in trouble, though. The 200-day moving average is trending slightly sideways. Is concerned with Apple's dependence on iPhone sales (52% of overall revenues). Yes, they are moving into other devices and services. If one major country says it will stem the flow of iPhones, Apple will be in trouble. He expects them to announce AI sometime this year.

Antitrust news this morning wasn't unanticipated. Not unusual, it will get played out. Wants to keep ecosystem tight for safety and cybersecurity. Still likes it. BRK is a big shareholder. Expects AI announcement around June. 

Apple is struggling. As a hardware company, they've satiated demand. They had to go to Google to get AI. Maybe they missed the latest technology. Sells at 25x PE, but will still grow. You don't need this, though the dividend will rise. Their forecast growth isn't enough to justify their multiple.

It has a growth problem since the growth rate is down from 6% to 1%. Revenue was down a bit last year. The smart phone side is a massive market but it is hard to move the needle with other products and it dropped the car component. It is doing well with its services division which is 30% of the business. Also it is quite tight with Alphabet/Google.

Shares have been in the doghouse with the street complaining that it isn't innovating particularly in AI and isn't growing. He disagrees. Their services stream is thriving based on a massive user base. Still says own, don't trade it. The news today about Apple talking about licensing Gemini AI for its phone is promising.

You can make exceptions, as he has with Apple and Nvidia. You can trim, but he's been reluctantly because these have been his best stocks. It's a subjective call, but you can trim when a stock because too large a stock in a portfolio.

He'd buy mor at $160, but the technicals are ugly, that its 200-day moving average is about to roll over as the market has been rallying. The 50-day wants to cross the 200-day--and you don't want that.

Capital is moving out of the hot momentum (i.e. Nvidia) stocks, so Apple is catching a bid. Apple is almost defensive, buys back a lot of shares and has huge cash flow.

It it continues to correct, this may become interesting. But it still trades at a 25x PE with almost no growth and a high market cap. Their share buyback helps.