Apple Inc (AAPL)

Apple is pausing now after a strong run and that's refreshing. These tech stocks are pausing for now. It's ignorant to say that stocks that Apple just peaked and that's it. Tech, generative AI in particular, will have deep impact for the coming years. Let's see how Apple's new headset will fare in the coming year. He's bullish.

They launch a new product next week, a new headset. He always says own it, don't trade it. It has room to grown in places like India, Brazil, Vietnam, the Philippines. They already have a big footprint in China that can grow.

It beat on stronger earnings on i-Phones etc. He likes it a lot but it is growing at 10% with a 26 X trading price. Meta and Google, like Apple, are essential  companies but trade at much better valuations.

People are wrongly focusing on short-term problems. The service business is growing like gangbusters, has potential to be very large. Services side is higher margin. Wearables continue to grow, as will the phone business. Has lots of cash. A great business.

Can't predict earnings performance report today. QCOM had tough numbers, mobile market is slowing. Not sure if that affects AAPL. Above 200-day MA, but that MA is still moving down. 6.6x price to sales, in line with the tech market, and not as expensive as some.

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).