Apple Inc (AAPL)

Look for resilience in their report. Apple must say that revenue grow will slow; they will be conservative in their outlook. Will their contraction only by 5%? They have a base on 800+ million users for their iPhones, services revenue will remain strong, and nearly $100 million free cash flow that will fuel share buybacks of around $90 million. The market views it as a safe haven.

Apple reports tomorrow. The stock is up 30% YTD. Incredible. Expects revenues to be -4%, and earnings -6%. They buy back a lot of shares. A great company. She sold the August $180s and collected $5.30. It won't trade that high into August. Doesn't see them beating earnings; doesn't see a rise in iPhone sales.

He owns 3% in his portfolio, not the 6% market cap weighting. Trades at 28x and a high 26x 2024. It's not set up for a fall, nor to rapidly grow from here. It will do find the rest of the year.

They report Thursday. He hopes they reveal their plans for India, and he's excited about this new, massive market--will be the best market in the world--and would get Apple off the China treadmill. Apple will sell phones to their wealthier classes.

Some are looking at Apple the wrong way, citing supply chain problems, but those are going away because they're diversifying their manufacturing away from China. Their services is doing very well and growing. Wearable also is faring well and growing. Remember that margins in services are big and cover smaller margins in hardware. Also, they continue to buy back shares.

He was always hesitant, because so much of revenue depended on the iPhone. Tie-in to so many services has widened its moat significantly, giving it a massive competitive advantage. Be cautious because of its valuation of 26-27x earnings, plus where we are in the economic cycle. Massive amounts of cash, good at share buybacks. Recession will weaken demand.

Headwinds are transitory. Supply chain issues should all be gone by end of year, just in time for the Christmas season. Investors should focus on wearables and SaaS. SaaS could easily be a $130B business by 2026, wearables $70B. SaaS is very high margin, and balances out hardware cyclicality. Wearables are doing incredibly well. 
Great balance sheet, buys back shares, lots of new products. Yield is 0.56%.

Will benefit from China's reopening, a country where the middle class continues to grow and this will benefit Apple.

Yesterday, they launched their buy-now, pay-later service, and shares rallied. Apple is cash-rich. The bears have run out of reasons to sell this, and shares rallied today. All big tech has benefitted from the First National Bank of doofuses (the regional bank meltdown earlier this month).

He'd like to add in lower, but it holds in so well. One of the best all-weather stocks you can have. Performs well in periods of volatility, element of safety. Main driver will be continuing to get that install base, as services growth is where the story's going to come from.

Goldman reversed its signal for the first time in 5years. Apple is trying to restore its momentum and has a huge influential on the wider market. Apple's fundamentals are sound. 

In this market, fundamentals matter and Apple has good fundamentals and can increase earnings. This upgrade is a positive signal for the wider market. You can be safe in Apple, but fundamentals will determine where the market goes.

The focus isn't on hardware, but the 1.1 billion user base globally. So, services, cross-selling and subscriptions are an opportunity here. Key point: folks are feeling a little better about the market. Consumers are resilient and enterprise is doing relatively well. Apple is up 19% YTD and trading at a premium. He isn't sure about 36% upside from here, though. Apple is a sentiment call.

They won't be immune from consumer weakness, though it's still fine to own it. However, the phone companies subsidize Apple which absorbs some of that weakness.

She just trimmed MSFT and Apple. Still likes tech, but took profits to fund other stocks in industrials and health care, which could lead the second half of 2023. Interest rates will still pressure tech. Apple, a large holding at 5%, has near-term concerns regarding China. Long-term, she could re-buy these shares.