Apple Inc (AAPL)

Whenever you think that their fundamentals are reaching an inflexion point, this company proves you wrong. True, they have a loyal customer base and resilient earnings. However, price and momentum have dramatically deteriorated. Near-term, their technicals don't look good, though long-term their fundamentals always win out and you can't bet against that. It depends on your outlook, short or long term? If you expect choppy markets, then Apple is defensive.

China remains their Achilles' heel, though the Tesla news today about China offers a halo effect. China doesn't want its citizens to buy Apple's phones.

It reports Thursday. There's been so much negativity around this, and they will report a disappointment, albeit the most-telegraphed disappointment in history. However, shares have been creeping high and away from his $160 downside target. Apple could highlight the performance of the world ex-US and China, a total market that's bigger than China, and stress their new tie-in with Nvidia.

He'd have to look at all the price targets, but one that's been beaten up is AAPL. But it probably won't spotlight its AI until June. Probably the most limited downside at this point, so you could add that one.

Analysts are looking forward to the developers' conference in June and the iPhone launch in September, but who knows if shares can take off without an AI tie-in? He suspects analysts are buying as estimates are cut, but interest will remain tepid until Apple shows that global growth is accelerating as much as it's shrinking in China, and that services revenues are holding. They make great products and now trades at a PE lower than what we're used to. They make a lot of money, but doesn't grow as fast as we'd like (or is not growing). If you think there won't be an iPhone refresh, then this is a sell down to $120, but he expects another refresh, but institutions won't let Apple fall that low. Buy a tranche at $160 then add even more if it falls down to $130. The longs will make a stand based on next year's earnings.

Does not own shares in company. Hard to determine future of business. Technology moves quick, and can erode margins. Challenge is that business is very large - difficult to grow.  Hardware business difficult to grow market share in. 

Last week, they had momentum on news of incorporating AI. It looked great. But now shares have fallen below $170 and that's disappointing. It has negative momentum.

It's dead money at best, not exciting the market with any earnings report. He struggles to see what impact AI will have on Apple, but they need to answer this question.

Some analysts see the company as a single product, the iPhone, but she counters that there are 2 billion active iPhones. Siri could be a Trojan horse in terms of AI. It could be dead money for a couple quarters, but you can enter the mname. She expects Apple to release a great, new product in the near future.

China remains a major overhang as the country keeps pushing its domestic phones and not Apple.

An analyst signalled buy on weakness, but Apple remains a hard call for her. Thes tock is still expensive for its future growth, despite new innovations just announced in AI. Trades at 25x. Is a great company, but she won't add to it now.

He's now bullish after exiting last November. They just announced AI innovations, which is a tailwind, though he's not that concerned about China pushing its own smartphones. They have $100 billion of free cash flow--they print money and he likes that.

He just added shares. Apple is a rare gainer in this down market this week and today. He held a large position and began trimming at $185-189. Finally, yesterday, Apple announced a new innovation (will add AI to its iPhone 16 and Macs), something the market had been waiting for. Also, shares held the October low. He likes to buy stocks then they're inloved, like Apple, It has room to run this year. If spending in services in China rises, Apple will benefit. Buyers responded when shares hit $160-170.

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.