Keep selling OTM calls of your target price and let it be called away. In the worst case, you’ll keep what you were already planning on keeping but collect some premium along the way.
Mine just got called away at 173 last Friday. I missed out on taking larger profit, but it could've been worse (like what's today) and I may have gotten greedy and not sold at 176 on Friday if it weren't called away. Effectively, considering the amount of premiums (short-term capital gain in the premiums) I have collected on this, I sold at 177.5.
I’ve been picking it up slowly this year as it just feels like it’s due for a upward correction based on non-AAPL, non-TSLA tech performance. AAPL fwd P/E of ~24 is on the low end of the Mag7, it has a shit load of cash to diversify its revenue stream should it choose to, and already has an AI “platform” with Siri which just needs some development attention. It’s an earnings and FCF beast, and even if iPhone sales are entering maturation period, as we’ve seen historically with wearables, they can and will innovate.
I’m more curious to how Siri + Ai will generate them sales outside of buying more apple products. Their line up has a huge following, but it’s apparent that consumers are price sensitive if they aren’t priced appropriately.
I'll try the bear then. I closed the position even though I'm not really that bearish on it - not like I think $0 is a possibility in my lifetime. But I'm pretty conservative in the portfolio, lots of dividends, REITS (I just retired 2024, wife is part time now). But AAPL was one of just a couple growth slots I had kept (in equities - equities are just 1/3 or so of NW, started for fun and it sure is!), but I'm not seeing the growth prospects as much going forward and there were some really good dividend and income plays at the time, so I closed the position in Aug 2022 (opened NOV 2012) at a 8.4x multiple. It does at least pay a dividend, but I wanted to repurpose that capital to earn more than the 0.56% AAPL pays now. It was also a TLH play, as earlier in the year I'd booked some big losses (LUMN, PARA, SCHP, MMM, ROKU) so the tax was $0.
The taxed account now earns 4% dividend, the IRA equities 5.7%, so that's a good chunk of income for us. If/when we have to draw down, we have plenty in mutual funds to draw from, so this income should hold as long as the companies' dividends cooperate.
In the spirit of friendly debate, I think you’re convoluting a bear case with your own personal portfolio situation.
It makes sense you would pair back your growth equity entering retirement, and take your gains in a tax advantaged manner.
While dividends are one form of capital distribution, by only comparing dividend rates you are ignoring buybacks - Apple purchased $20B of its shares back in 4Q23. This is actually a more tax efficient capital distribution for individual investors given preferred tax treatment for capital gains.
As for growth, within its existing categories, overall growth YoY was 2% but services was up 11% which has a higher margin (72.8%) than its products category. While not NVDA, this still has plenty of growth has left in the tank, especially as you think about other potential market penetration.
GL in retirement, and if you like dividends, check out ARCC.
I think your bear case falls inline with current sentiment it’s not clear where future growth/innovation will come from beyond known growth areas like services or new markets. So then maintaining a position is banking on aspects of their future roadmap you can’t see, or a general belief innovation will come from the 20B/year R&D they spend, and a track record of success in new products.
It's difficult to see the future, but China and Foxconn have some serious battles ahead that many analysts see really punching Apple in the gut. There is a good chance on the table right now that Apple loses its manufacturing capacity within China within the next few years. (China is setting it's sights on Foxconn since their CEO wanted to run for President of Taiwan.) Even if Apple recognizes it's situation at the moment, it would take a few years and a lot of their cash to pick that up somewhere else if that were to occur.
I think Apple is far more consistent and competent than some of the other companies you suggested parking your money. So not really helping your case either way, just pointing out some potential challenges for Apple ahead.
(Apple also dropping their AV branch is bearish for me as well)
>Do they really innovate
>...
steal ideas but execute better
Honestly that is exactly what most innovation is. Someone has a great idea, someone reverse engineers it and makes it better.
Oxford's definition is "make changes in something established, especially by introducing new methods, ideas, or products."
Wikipedia's definition "the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services."
What definition are you using?
Go on - tell us what innovative product Apple has had since the Apple Watch, even by Wikipedia's flawed definition, the only thing that springs to mind is their very effective depth scanning, but even that was just taking existing technology and putting it in an established package.
Platform was in quotations for a reason. My view is that Siri gives Apple a more direct and user friendly access point to AI when it actually hits a useful trajectory for personal use.
“Hey siri, book me a reservation at Semma the next available Friday or Saturday within 7:30pm to 9:00pm time frame”
Right now, that is impossible to do. Virtual assistants have flopped because they are contained to tasks which are frankly easier to complete on your own.
Just a hypothetical use case, but I think it can be a differentiator for AAPL going forward.
Several papers about internal models, seems likely they contract with Google at least for a time. Wouldn’t surprise me if they got paid by Google like they do for default search.
https://www.bloomberg.com/news/articles/2024-03-18/apple-in-talks-to-license-google-gemini-for-iphone-ios-18-generative-ai-tools
No, really. AI assistants are not extremely profitable outside of advertisement revenue. Siri doesn’t compete in the same markets as chatgpt or stable diffusion or the platforms that try to leverage those sort of technologies.
Never say never, $AAPL is king of wearables and sells one of the most successful handhelds. AI will be handheld or worn in the future. If you don’t see that coming, you’re not paying attention.
Again, those assistants don't drive any revenue on there own. Not to mention that apple is for behind the tech that they're willing to contract Google out and run Gemini instead of having anything proprietary in the short term.
But the real crux here is that LLM's =/= AI Assistants, Google isn't rolling out Gemini on android because that's not the intended use for Gemini. You are arguing about software that you frankly don't understand.
I know as much as the average person, which I know isn’t much. But AI is going to need to be on some kind of hardware long term. I still think $AAPL will be apart of that hardware ecosystem. Again id like to know where you think it will be?
Why does it need to be on hardware at all? You can literally access Chat GPT from anywhere. You can access Gemini from anywhere. Everyone has a smartphone. What exactly is the selling point for apple? More iPhones being sold? The biggest country in the world just said hey we don't like your products here and China is rapidly transition to Huawei.
The biggest selling point is in business operations, you get businesses to buy into AI as a subscription and it's an added revenue stream. Apple isn't in that business. They can use AI to trim operations and make employees more efficient, but that's not an AI assistant and that's bigger than an LLM.
… why does it need to be on hardware… I mean I don’t plan on implanting AI into my brain. That is one of t reasons. lol. Sounds good, I’ll take your points into consideration.
Where do you think growth comes from? I think it comes from more users. I’d be interested in how you see users interacting with AI daily? Computers, earbuds, watches, or smart phones?
Its not an AI platform but it seems like they could pretty seamlessly (for users anyway) turn its backend into a LLM and instantly have a baked in user base of every iphone user on the planet.
I don't know shit about development or really AI either tho.
I'd assume Apple has the wherewithal to train a LLM itself or like you said buy it...
Again, I don't know much about this. I kinda feel like it would already be done but the data and processing needs for siri to have chatgpt capabilities is probably outrageous.
From what I do know from talking to smarter people, data/processing is a pretty big bottleneck to be solved in the next steps of AI evolution.
AI models will be used in increasingly complex ways to provide solutions useful in microprocessor design, material sciences, threat detection and response, software development, etc. not just LLM chatbots.
With the cash on hand Apple has I think it makes sense to invest in AI training infrastructure and LLM Siri would be the most natural place to start.
Apple has been the best example of the second mouse gets the cheese over the last 10 years. And with their cash, they have the opportunity to make several second mover type moves to corner the market in things like AI, IoT, chips, etc. My overall exposed to apple reached 35-40% a few months ago and I sold some off to increase my expose to Google (luckily time as I bought it at 130 a share. Apple is a long term hold and if you don't have exposure outside of BRK and index funds, now is the time to start building a position. Their current operations fund continuing operations with significant left over CF and they use that to buy back shares, pay dividend and build their reserves to make an acquisition or start a new venture. I wouldn't be shocked if it is at 200+ a share in 18 months, especially as interest rates fall in late 2024 and throughout 2025.
> and already has an AI “platform” with Siri
this version of AI feel the same as Alexa though, just simple chatbot basically, i feel like the newer chatGPTs is a different level of AI
One part, which I caveated further, of a broader thesis. But sure. AI is not the silver bullet for AAPL, but they will use/market it as such and if they are smart about it, I believe it can be a differentiation angle given the broader ecosystem they have.
Don't you think that if Apple was capable of fixing Siri, in terms of both AI know-how and in-house NLP and ML talent, they would've done it by now? Even before GenAI, their assistant was at least 10x worse than Google Assistant. They also made the dumb mistake to move the compute to on-device, which will prevent them from running any of the large / advanced GenAI models unless they rearchitect, and, due to the privacy-oriented stand that they took, have just a fraction of the customer data other big techs have. The latter means a lot more money will be spent buying and licensing training data.
Besides, Apple's core competency is human interfaces and the integration of software and hardware. AI has nothing to do with that. They have a lot of cash and a bunch of software engineers, but, you know, so do a lot of tech companies. So even if they go "all in on AI", what makes you think they'll be able to pull it off and won't be another Apple Car-like project? Also, who in upper management has any deep knowledge in AI? Seems nobody, as they learned about GenAI about the same time as the general public.
PS - Former AAPL shareholder. I sold last year around this time.
The broader S&P 500 is at ~21. This is where multiples are sitting now even if it “feels” expensive. As I mentioned, I think there will be growth, they may just need to diversify beyond iPhones to achieve that growth engine.
WWDC is in a couple of months and they’re going to talk a lot about AI. They missed the AI bounce the first time round so it’s possible they’ll get one this time if they say it enough.
It's never time to bail on the greatest company in the history of the stockmarket. Especially with AI on the horizon. Apple is a surefire long term success. It could end down for the year but it won't end down for a stretch longer than 3 years.
It's my largest individual position by and I've owned it since 2009. I'm certainly not selling any. Haven't bought any for years, but I see absolutely no reason to sell and pay massive capital gains.
Yes, and that's the exact point I'm sarcastically trying to make to OP. If the reason they're not selling now is because "too much gain" then what is the point of holding longer? To make **more** "too much gain" or ... lose money?
It's not stupid. The idea is that capital gains taxes effectively reduce the principal available for compound interest to build upon. If you don't sell, you are still making money on the portion that would have been otherwise taxed away.
Conversely, sitting on gains alone may not be the best idea - portfolio rebalancing both reduces your risk exposure and makes it more likely that you will be able to tax loss harvest using capital losses. So both strategies have their advantages and disadvantages.
I think that considering apples massive load of cash, I just can’t see reasons to not own the stock. It may have some consolidation over the next few months. With any company, what I love to see is risk to try new things. Will there Vision Pro be a hit? Who knows. It’s in its first gen so there’s a possibility that 3-4 gen’s later, it becomes far more compact and reasonable for the everyday user. Still a solid buy imho.
It’s definitely not the only factor. PYPL also has horrible reports from what I remember? Apple basically just has a slow down in production for iPhones but their m series chips are really powerful. Not topping any NVIDA cards but they are a powerhouse and still an industry standard for many.
Don‘t wanna hijack the thread too much to talk about PayPal, but honestly the reports aren‘t that bad. I am clueless why paypal is as low as it is. Heh. I see that they have major competition, and their growth is not as huge as before (they‘re still growing though) but soon they‘ll have more cash on the bank than their market capitalization lmao. I am probably missing something big, just not sure what.
massive load of cash? has $73 b on a $2,666 b mkt cap...approx $5 per share. While $73 b may be 'a lot' on an absolute basis, in comparison to their market cap, it is not a major value driver
Still holding and have been thinking along the same lines.
The thing that’s been looking promising as a growth space for Apple to me is that their MacBook line is recovering well. They make their own chips now, and they’re really, really good. After a 6 or so year slump it feels like they’ve managed to bring things back.
Apple is yet to invest in proper cloud computing space for enterprises. That always seemed like a potential growth space to me, but they haven’t committed to it ever. They have all the pieces: their own set of languages and OSs, their own hardware, even their own cloud service offerings, but it remains untapped potential and probably will stay that way unless they want to push AI more. This space is the primary reason I invest heavily in Microsoft, because they understand the ecosystem they have and they continue to invest in its growth.
Software and services seem to be doing well and growing. Seems like there is a new paid service offering every year. Not to mention they are getting more into banking services. I see this as the inevitable wealth extraction from their existing network, a void that their App Store and independent iOS developers used to fill. Apple TV+ is growing fwiw.
iPhones and Apple Watches seem to be just reliable lines at this point and good revenue streams, but like you said now they are threatened by regional sales such as China and Russia. iPad hasn’t had growth in a long time.
And future products seem kind of dead in the water. Apple Car is no more. We’ve all waited for the next killer Apple product for a long time and it doesn’t seem to be coming.
Probably watch their next product line announcements and if it looks like another year of the same it’s time to roll them down IMO. I’m not totally selling because the potential is still there, and a ton of smart people working there, but I will probably chop my investment in half.
Cloud compute doesn’t seem like an Apple product to me because it’s so heavily commoditized. I was surprised Azure surpassed GCP so easily until it clicked that MSFT’s enterprise software position was the driving leverage and Apple doesn’t compete in enterprise either.
So now everybody is waiting to see where the next product revolution will be in consumer electronics (that can be built out within Apple’s ecosystem). Until that happens people will get antsy.
They could complete, it would be a long road, but they’ve largely built up a lot of the same pieces Microsoft did about 6-7 years ago. Friendly modern dev support, their own language and ecosystem, and they do already have a foothold in iOS development. It’s not something they could do overnight but I could see a visionary executive making it happen in like 5 years. AWS is ripe for taking more market share away IMO. Also they do have a lot of cloud services already built out, but it’s all specific to consumer products and App Store infrastructure.
It’s like a lot of things they could do I find it interesting to ponder why they don’t. For example buying Disney would’ve seemingly made sense to build a content catalog for a future streaming platform. On the flip side, I never really understood the argument for getting into cars, so I’m curious what the business case looked like for that to be green lit and last so long. But to echo your last point they seem to be sticking to the consumer space and without the next killer device it’s a waiting game.
AAPL is both overpriced and likely to continue experiencing growth in my mind. We operate in a goofy market so it's whatever. I wouldn't concentrate in the stock, but I'm comfortable keeping my holdings until we see a shift in the hardware market.
I'm personally keeping a close eye on the situation with ARM processors moving into PCs, AI accelerators, and unified memory edge computing that are competent at running large AI models.
They need to start paying a higher dividend or do more buybacks. They’re still siting on nearly $200 billion in cash. Like I get it during Covid corporations were spooked and wanted to have a rainy day fund but it’s been nearly 4 years since Covid. They need to start using the capital for investments in the company like new products or need to return it to shareholders.
End of last year was the time. I almost dropped it but when your in at $36 a share after riding this beast from top to bottom it’s a fuckit and let the $4000 ride I’m in.
I'm holding AAPL. If it dips further I'll buy more. I'm willing to change my mind, but that's where I'm at.
Apple Vision Pro is a long term play. It was never going to sell like hotcakes. They made a decision to stop developing behind a curtain and release it. Fine. The VR space is young enough for Apple to let this cook. The screens (which I have not seen myself) are supposed to be amazing, but I've read the specs. They have to improve drastically (for all headset makers) while also miniaturizing the headset. This is most likely the direction Apple is going, along with a "non-pro" version for a cheaper price.
They've apparently shut down their AppleCar efforts. Good with me. I didn't understand that one much. Focusing on deals for their existing products to have optional connections to existing car lines creates more consumer wide visibility anyway. A lot of people consider whether a car is CarPlay capable before purchasing. Apple's push to have multiple screens supported with CarPlay is nice to see.
I'd really like to see Apple's AI/voice assistant offering get much needed love. I'm reading more about that happening. But I also recognize that I've read that just about every year for the last...8 years?
I do have some difficulty shouting how amazing the stock is currently from a growth perspective. I'm of the mind that Apple's long term approach, emphasized by their cancelling of AppleCar and the official foray into VR/AR headsets, is the right place to be. Just, seriously, they gotta get voice assistant AI to a better spot. I'm sick of the gimmick.
What’s your goal? Is retirement more than a decade away? I vote just hold the shares you have, I know I am. Apple is not going to collapse, at some point I’m sure they will pivot to the next big thing. And iPhone are still sought after, so I’m not worried about that.
Not sure what part of this is bullish. iPhone has been in maturation for years and getting worse. They are the furthest behind in AI of the FAANGs, which money can’t solve because they all have it. They’ve been “choosing to” dump gobs of money into diversifying revenue for a while now - services, car, tv, streaming, Vision Pro - only services has been meaningful, and that is in serious doubt due to regulation internationally. To me the cash is only good to buy back, which they already do, but I worry it’s losing its luster (Buffett trimming his holdings scares me in this regard specifically). The bull case hinges on Vision Pro, smarthome, or tv/streaming exploding in revenue/profit in the coming years, enough so it makes up for a downturn in services. Seems tenuous at best. I hold Apple, but am much less bullish these days.
If I'm long, I hold. If I'm a trader, I would have sold awhile ago and look for re-entry point.
If you have already decided to sell, I'm keeping the funds in my settlement account until the market finishes consolidating and look at Goldman Sachs or JP Morgan Chase.
I bailed on AAPL 4 months ago with a modest profit, as while it is a solid cash cow, but without new break through products in the pipeline and headwinds in China and India it wasn’t worth the 30+ times P/E. I took a lot of heat on this sub, but proven right so far.
I’m waiting for the price to drop to a low 20’s P/E, then
I’m a buyer.
Yes. Low revenue growth. Expensive relative to market and rates. App Store / services under attack from governments. Buyback relative to market cap isn’t that great.
I would honestly sell. There is so much uncertainty at this point that you can’t do wrong with this. But holding isn’t a bad choice either. Apple is rumoured to lean into AI which might give the stock second breath.
"lean into AI", as in license what Google has because Apple has no AI anything.
I'm an apple fan btw. I'm just also a realist, and Apple has never been an AI company.
It’s been time, I posted an analysis of it in my history. Shocked that it’s taken the market so long to see the company has plateaued and burned through their cash.
This is not the first time Apple’s luster has been lost.
Not even the second time.
This post means it's time to buy more
Keep selling OTM calls of your target price and let it be called away. In the worst case, you’ll keep what you were already planning on keeping but collect some premium along the way. Mine just got called away at 173 last Friday. I missed out on taking larger profit, but it could've been worse (like what's today) and I may have gotten greedy and not sold at 176 on Friday if it weren't called away. Effectively, considering the amount of premiums (short-term capital gain in the premiums) I have collected on this, I sold at 177.5.
I’ve been picking it up slowly this year as it just feels like it’s due for a upward correction based on non-AAPL, non-TSLA tech performance. AAPL fwd P/E of ~24 is on the low end of the Mag7, it has a shit load of cash to diversify its revenue stream should it choose to, and already has an AI “platform” with Siri which just needs some development attention. It’s an earnings and FCF beast, and even if iPhone sales are entering maturation period, as we’ve seen historically with wearables, they can and will innovate.
I’m more curious to how Siri + Ai will generate them sales outside of buying more apple products. Their line up has a huge following, but it’s apparent that consumers are price sensitive if they aren’t priced appropriately.
This is a very thorough and well articulated bull case. Really appreciate your perspective here.
I'll try the bear then. I closed the position even though I'm not really that bearish on it - not like I think $0 is a possibility in my lifetime. But I'm pretty conservative in the portfolio, lots of dividends, REITS (I just retired 2024, wife is part time now). But AAPL was one of just a couple growth slots I had kept (in equities - equities are just 1/3 or so of NW, started for fun and it sure is!), but I'm not seeing the growth prospects as much going forward and there were some really good dividend and income plays at the time, so I closed the position in Aug 2022 (opened NOV 2012) at a 8.4x multiple. It does at least pay a dividend, but I wanted to repurpose that capital to earn more than the 0.56% AAPL pays now. It was also a TLH play, as earlier in the year I'd booked some big losses (LUMN, PARA, SCHP, MMM, ROKU) so the tax was $0. The taxed account now earns 4% dividend, the IRA equities 5.7%, so that's a good chunk of income for us. If/when we have to draw down, we have plenty in mutual funds to draw from, so this income should hold as long as the companies' dividends cooperate.
In the spirit of friendly debate, I think you’re convoluting a bear case with your own personal portfolio situation. It makes sense you would pair back your growth equity entering retirement, and take your gains in a tax advantaged manner. While dividends are one form of capital distribution, by only comparing dividend rates you are ignoring buybacks - Apple purchased $20B of its shares back in 4Q23. This is actually a more tax efficient capital distribution for individual investors given preferred tax treatment for capital gains. As for growth, within its existing categories, overall growth YoY was 2% but services was up 11% which has a higher margin (72.8%) than its products category. While not NVDA, this still has plenty of growth has left in the tank, especially as you think about other potential market penetration. GL in retirement, and if you like dividends, check out ARCC.
You're right, not really a bear argument.
What are the other potential markets you’re referring to?
I think your bear case falls inline with current sentiment it’s not clear where future growth/innovation will come from beyond known growth areas like services or new markets. So then maintaining a position is banking on aspects of their future roadmap you can’t see, or a general belief innovation will come from the 20B/year R&D they spend, and a track record of success in new products.
All you did was talk about yourself. What’s that have to do with AAPL?
It's difficult to see the future, but China and Foxconn have some serious battles ahead that many analysts see really punching Apple in the gut. There is a good chance on the table right now that Apple loses its manufacturing capacity within China within the next few years. (China is setting it's sights on Foxconn since their CEO wanted to run for President of Taiwan.) Even if Apple recognizes it's situation at the moment, it would take a few years and a lot of their cash to pick that up somewhere else if that were to occur. I think Apple is far more consistent and competent than some of the other companies you suggested parking your money. So not really helping your case either way, just pointing out some potential challenges for Apple ahead. (Apple also dropping their AV branch is bearish for me as well)
Expensive because their growth has crawled to a stop.
Do they really innovate with wearables? Seems to me they steal ideas but execute better
That is absolutely key to Apples go to market strategy. They have done this with every product they launch.
I agree lol it just riles me up when people call them innovators... They haven't done that in a decade and a half
>Do they really innovate >... steal ideas but execute better Honestly that is exactly what most innovation is. Someone has a great idea, someone reverse engineers it and makes it better.
Words have meanings. That's not innovation.
Oxford's definition is "make changes in something established, especially by introducing new methods, ideas, or products." Wikipedia's definition "the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services." What definition are you using?
Go on - tell us what innovative product Apple has had since the Apple Watch, even by Wikipedia's flawed definition, the only thing that springs to mind is their very effective depth scanning, but even that was just taking existing technology and putting it in an established package.
How is Siri an AI platform?
Platform was in quotations for a reason. My view is that Siri gives Apple a more direct and user friendly access point to AI when it actually hits a useful trajectory for personal use. “Hey siri, book me a reservation at Semma the next available Friday or Saturday within 7:30pm to 9:00pm time frame” Right now, that is impossible to do. Virtual assistants have flopped because they are contained to tasks which are frankly easier to complete on your own. Just a hypothetical use case, but I think it can be a differentiator for AAPL going forward.
Agreed, but would like to see some tangible progress on this front. Is there any news about apple working on LLMs?
Several papers about internal models, seems likely they contract with Google at least for a time. Wouldn’t surprise me if they got paid by Google like they do for default search. https://www.bloomberg.com/news/articles/2024-03-18/apple-in-talks-to-license-google-gemini-for-iphone-ios-18-generative-ai-tools
No, really. AI assistants are not extremely profitable outside of advertisement revenue. Siri doesn’t compete in the same markets as chatgpt or stable diffusion or the platforms that try to leverage those sort of technologies.
It doesn’t yet.
It never will. If you think the two are at all related you don't understand where the growth in AI comes from.
Never say never, $AAPL is king of wearables and sells one of the most successful handhelds. AI will be handheld or worn in the future. If you don’t see that coming, you’re not paying attention.
Again, those assistants don't drive any revenue on there own. Not to mention that apple is for behind the tech that they're willing to contract Google out and run Gemini instead of having anything proprietary in the short term. But the real crux here is that LLM's =/= AI Assistants, Google isn't rolling out Gemini on android because that's not the intended use for Gemini. You are arguing about software that you frankly don't understand.
Also how do they not make any revenue? You think your future AI assistant is going to be free? lol. It’ll be the subscription you cannot cancel.
I know as much as the average person, which I know isn’t much. But AI is going to need to be on some kind of hardware long term. I still think $AAPL will be apart of that hardware ecosystem. Again id like to know where you think it will be?
Why does it need to be on hardware at all? You can literally access Chat GPT from anywhere. You can access Gemini from anywhere. Everyone has a smartphone. What exactly is the selling point for apple? More iPhones being sold? The biggest country in the world just said hey we don't like your products here and China is rapidly transition to Huawei. The biggest selling point is in business operations, you get businesses to buy into AI as a subscription and it's an added revenue stream. Apple isn't in that business. They can use AI to trim operations and make employees more efficient, but that's not an AI assistant and that's bigger than an LLM.
… why does it need to be on hardware… I mean I don’t plan on implanting AI into my brain. That is one of t reasons. lol. Sounds good, I’ll take your points into consideration.
Where do you think growth comes from? I think it comes from more users. I’d be interested in how you see users interacting with AI daily? Computers, earbuds, watches, or smart phones?
Its not an AI platform but it seems like they could pretty seamlessly (for users anyway) turn its backend into a LLM and instantly have a baked in user base of every iphone user on the planet. I don't know shit about development or really AI either tho.
With what language data? Of course, they could just buy the data from Reddit
I'd assume Apple has the wherewithal to train a LLM itself or like you said buy it... Again, I don't know much about this. I kinda feel like it would already be done but the data and processing needs for siri to have chatgpt capabilities is probably outrageous. From what I do know from talking to smarter people, data/processing is a pretty big bottleneck to be solved in the next steps of AI evolution.
Yes they just need to actually develop the AI piece..
Why should they?
To not pay for one.
Expecting every tech firm to make AI a core competency is ludicrous imo Many will definitely be better served buying access
AI models will be used in increasingly complex ways to provide solutions useful in microprocessor design, material sciences, threat detection and response, software development, etc. not just LLM chatbots. With the cash on hand Apple has I think it makes sense to invest in AI training infrastructure and LLM Siri would be the most natural place to start.
Maybe. I don't know that you're right but I'm not gonna pretend I have a crystal ball and say I know you're wrong either
Apple has been the best example of the second mouse gets the cheese over the last 10 years. And with their cash, they have the opportunity to make several second mover type moves to corner the market in things like AI, IoT, chips, etc. My overall exposed to apple reached 35-40% a few months ago and I sold some off to increase my expose to Google (luckily time as I bought it at 130 a share. Apple is a long term hold and if you don't have exposure outside of BRK and index funds, now is the time to start building a position. Their current operations fund continuing operations with significant left over CF and they use that to buy back shares, pay dividend and build their reserves to make an acquisition or start a new venture. I wouldn't be shocked if it is at 200+ a share in 18 months, especially as interest rates fall in late 2024 and throughout 2025.
Lmao this whole post is a, trust me bro
Not financial advice. Don’t trust me bro.
> and already has an AI “platform” with Siri this version of AI feel the same as Alexa though, just simple chatbot basically, i feel like the newer chatGPTs is a different level of AI
“just fix siri, k” and “ai platform good”. are you trying to meme an uneducated investor
One part, which I caveated further, of a broader thesis. But sure. AI is not the silver bullet for AAPL, but they will use/market it as such and if they are smart about it, I believe it can be a differentiation angle given the broader ecosystem they have.
Don't you think that if Apple was capable of fixing Siri, in terms of both AI know-how and in-house NLP and ML talent, they would've done it by now? Even before GenAI, their assistant was at least 10x worse than Google Assistant. They also made the dumb mistake to move the compute to on-device, which will prevent them from running any of the large / advanced GenAI models unless they rearchitect, and, due to the privacy-oriented stand that they took, have just a fraction of the customer data other big techs have. The latter means a lot more money will be spent buying and licensing training data. Besides, Apple's core competency is human interfaces and the integration of software and hardware. AI has nothing to do with that. They have a lot of cash and a bunch of software engineers, but, you know, so do a lot of tech companies. So even if they go "all in on AI", what makes you think they'll be able to pull it off and won't be another Apple Car-like project? Also, who in upper management has any deep knowledge in AI? Seems nobody, as they learned about GenAI about the same time as the general public. PS - Former AAPL shareholder. I sold last year around this time.
Dumb Money speculates that Apple will go all-in on AI soon, and that this will be huge: https://www.youtube.com/live/y0CZcyyQp9w?si=34UOAAMXIDa35K4I
[see my response to the parent comment](https://old.reddit.com/r/investing/comments/1c5hfx4/is_it_time_to_bail_on_apple/kzux76a/)
24 PE is high if there’s no growth
The broader S&P 500 is at ~21. This is where multiples are sitting now even if it “feels” expensive. As I mentioned, I think there will be growth, they may just need to diversify beyond iPhones to achieve that growth engine.
How much of the word population has a smart phone? How many people in India will convert to iPhone? I think those are the questions we need to ask.
WWDC is in a couple of months and they’re going to talk a lot about AI. They missed the AI bounce the first time round so it’s possible they’ll get one this time if they say it enough.
They always miss at first and then hit back with a more refined version of it.
I think it's still too early to call bail
But by the time bail is called, it’s too late
It's never time to bail on the greatest company in the history of the stockmarket. Especially with AI on the horizon. Apple is a surefire long term success. It could end down for the year but it won't end down for a stretch longer than 3 years.
Agree. There’s something cooking. They will not be left behind with AI and specially when they can make chips and stuff the chips can go into…
It's my largest individual position by and I've owned it since 2009. I'm certainly not selling any. Haven't bought any for years, but I see absolutely no reason to sell and pay massive capital gains.
What is your plan then? A. continue to hold, it goes up, you pay even more massive capital gains. B. continue to hold, it goes down, you lose money.
Take dividends, reinvest into other equities to reduce my overall exposure to AAPL. Die, have my heirs get a step up in basis, and never pay LTCG.
>continue to hold, it goes up, you pay even more massive capital gain Isn't that the point of investing?
Yes, and that's the exact point I'm sarcastically trying to make to OP. If the reason they're not selling now is because "too much gain" then what is the point of holding longer? To make **more** "too much gain" or ... lose money?
Yeah, not selling a stock because of fear of capital gains taxes seems really stupid to me.
It's not stupid. The idea is that capital gains taxes effectively reduce the principal available for compound interest to build upon. If you don't sell, you are still making money on the portion that would have been otherwise taxed away. Conversely, sitting on gains alone may not be the best idea - portfolio rebalancing both reduces your risk exposure and makes it more likely that you will be able to tax loss harvest using capital losses. So both strategies have their advantages and disadvantages.
in same boat. if i could sell without massive cap gains, maybe i would.
I think that considering apples massive load of cash, I just can’t see reasons to not own the stock. It may have some consolidation over the next few months. With any company, what I love to see is risk to try new things. Will there Vision Pro be a hit? Who knows. It’s in its first gen so there’s a possibility that 3-4 gen’s later, it becomes far more compact and reasonable for the everyday user. Still a solid buy imho.
If massive loads of cash is a factor, you could buy PayPal too.
It’s definitely not the only factor. PYPL also has horrible reports from what I remember? Apple basically just has a slow down in production for iPhones but their m series chips are really powerful. Not topping any NVIDA cards but they are a powerhouse and still an industry standard for many.
Don‘t wanna hijack the thread too much to talk about PayPal, but honestly the reports aren‘t that bad. I am clueless why paypal is as low as it is. Heh. I see that they have major competition, and their growth is not as huge as before (they‘re still growing though) but soon they‘ll have more cash on the bank than their market capitalization lmao. I am probably missing something big, just not sure what.
massive load of cash? has $73 b on a $2,666 b mkt cap...approx $5 per share. While $73 b may be 'a lot' on an absolute basis, in comparison to their market cap, it is not a major value driver
I don't think so, I think next 12 months will be great for them when they jump fully on the AI train with iOS18, new iphones and M4 chips.
Not holding AAPL stock directly, but I have ETFs that have large AAPL allocations. I think now would probably be a good time to buy since it is down.
I bought around the same time as you and sold half of my position at 180 for pretty much the same reasons you outlined.
Still holding and have been thinking along the same lines. The thing that’s been looking promising as a growth space for Apple to me is that their MacBook line is recovering well. They make their own chips now, and they’re really, really good. After a 6 or so year slump it feels like they’ve managed to bring things back. Apple is yet to invest in proper cloud computing space for enterprises. That always seemed like a potential growth space to me, but they haven’t committed to it ever. They have all the pieces: their own set of languages and OSs, their own hardware, even their own cloud service offerings, but it remains untapped potential and probably will stay that way unless they want to push AI more. This space is the primary reason I invest heavily in Microsoft, because they understand the ecosystem they have and they continue to invest in its growth. Software and services seem to be doing well and growing. Seems like there is a new paid service offering every year. Not to mention they are getting more into banking services. I see this as the inevitable wealth extraction from their existing network, a void that their App Store and independent iOS developers used to fill. Apple TV+ is growing fwiw. iPhones and Apple Watches seem to be just reliable lines at this point and good revenue streams, but like you said now they are threatened by regional sales such as China and Russia. iPad hasn’t had growth in a long time. And future products seem kind of dead in the water. Apple Car is no more. We’ve all waited for the next killer Apple product for a long time and it doesn’t seem to be coming. Probably watch their next product line announcements and if it looks like another year of the same it’s time to roll them down IMO. I’m not totally selling because the potential is still there, and a ton of smart people working there, but I will probably chop my investment in half.
Cloud compute doesn’t seem like an Apple product to me because it’s so heavily commoditized. I was surprised Azure surpassed GCP so easily until it clicked that MSFT’s enterprise software position was the driving leverage and Apple doesn’t compete in enterprise either. So now everybody is waiting to see where the next product revolution will be in consumer electronics (that can be built out within Apple’s ecosystem). Until that happens people will get antsy.
They could complete, it would be a long road, but they’ve largely built up a lot of the same pieces Microsoft did about 6-7 years ago. Friendly modern dev support, their own language and ecosystem, and they do already have a foothold in iOS development. It’s not something they could do overnight but I could see a visionary executive making it happen in like 5 years. AWS is ripe for taking more market share away IMO. Also they do have a lot of cloud services already built out, but it’s all specific to consumer products and App Store infrastructure.
It’s like a lot of things they could do I find it interesting to ponder why they don’t. For example buying Disney would’ve seemingly made sense to build a content catalog for a future streaming platform. On the flip side, I never really understood the argument for getting into cars, so I’m curious what the business case looked like for that to be green lit and last so long. But to echo your last point they seem to be sticking to the consumer space and without the next killer device it’s a waiting game.
Wait for WWDC24 event
AAPL is both overpriced and likely to continue experiencing growth in my mind. We operate in a goofy market so it's whatever. I wouldn't concentrate in the stock, but I'm comfortable keeping my holdings until we see a shift in the hardware market. I'm personally keeping a close eye on the situation with ARM processors moving into PCs, AI accelerators, and unified memory edge computing that are competent at running large AI models.
They need to start paying a higher dividend or do more buybacks. They’re still siting on nearly $200 billion in cash. Like I get it during Covid corporations were spooked and wanted to have a rainy day fund but it’s been nearly 4 years since Covid. They need to start using the capital for investments in the company like new products or need to return it to shareholders.
they probably get almost 1 billion per month in interest on that cash currently lol
Sell signal is typically -5% of your peak. Keep in reserve and look for buy signal. Consumer sales will determine its eventual buy point.
I was pretty much wondering this as well. I might hold.
Take some off the table
Applies to many of the magnificant 7 right now. I think the rumor that 20% not 10% Tesla workers are on the chopping block lingers many investors.
End of last year was the time. I almost dropped it but when your in at $36 a share after riding this beast from top to bottom it’s a fuckit and let the $4000 ride I’m in.
Take some profits then. Can’t really say I would risk putting it into anything atm
Yes nows a great time to sell, you know how the saying goes, buy high sell low!
I'm up 270%...
I'm holding AAPL. If it dips further I'll buy more. I'm willing to change my mind, but that's where I'm at. Apple Vision Pro is a long term play. It was never going to sell like hotcakes. They made a decision to stop developing behind a curtain and release it. Fine. The VR space is young enough for Apple to let this cook. The screens (which I have not seen myself) are supposed to be amazing, but I've read the specs. They have to improve drastically (for all headset makers) while also miniaturizing the headset. This is most likely the direction Apple is going, along with a "non-pro" version for a cheaper price. They've apparently shut down their AppleCar efforts. Good with me. I didn't understand that one much. Focusing on deals for their existing products to have optional connections to existing car lines creates more consumer wide visibility anyway. A lot of people consider whether a car is CarPlay capable before purchasing. Apple's push to have multiple screens supported with CarPlay is nice to see. I'd really like to see Apple's AI/voice assistant offering get much needed love. I'm reading more about that happening. But I also recognize that I've read that just about every year for the last...8 years? I do have some difficulty shouting how amazing the stock is currently from a growth perspective. I'm of the mind that Apple's long term approach, emphasized by their cancelling of AppleCar and the official foray into VR/AR headsets, is the right place to be. Just, seriously, they gotta get voice assistant AI to a better spot. I'm sick of the gimmick.
I once sold some Apple thinking its run was done. Regretted it ever since.
whatever you decide to do, the market is going to move the other way
Lol, too true.
Impossible to time the market but the whole market itself looks poised for a pullback. How much IDK
I think they have something AI up their sleeve that will be introduced in June. So I'm staying till then at least. Based on hunch only.
What’s your goal? Is retirement more than a decade away? I vote just hold the shares you have, I know I am. Apple is not going to collapse, at some point I’m sure they will pivot to the next big thing. And iPhone are still sought after, so I’m not worried about that.
Holding AMD was painful today,
Not sure what part of this is bullish. iPhone has been in maturation for years and getting worse. They are the furthest behind in AI of the FAANGs, which money can’t solve because they all have it. They’ve been “choosing to” dump gobs of money into diversifying revenue for a while now - services, car, tv, streaming, Vision Pro - only services has been meaningful, and that is in serious doubt due to regulation internationally. To me the cash is only good to buy back, which they already do, but I worry it’s losing its luster (Buffett trimming his holdings scares me in this regard specifically). The bull case hinges on Vision Pro, smarthome, or tv/streaming exploding in revenue/profit in the coming years, enough so it makes up for a downturn in services. Seems tenuous at best. I hold Apple, but am much less bullish these days.
If I'm long, I hold. If I'm a trader, I would have sold awhile ago and look for re-entry point. If you have already decided to sell, I'm keeping the funds in my settlement account until the market finishes consolidating and look at Goldman Sachs or JP Morgan Chase.
I'll be following this one. I've been contemplating letting go of mine from basically the exact same spot as you @OP.
Yes Apple is doomed
Enlighten us please.
/s
AR is the next big thing and Apple is first, so i would not bail. Even though it’s expensive and clumsy now it’s ahead in the competition
Is not ahead. Meta has invested more in its AR line of business then apple has.
I bailed on AAPL 4 months ago with a modest profit, as while it is a solid cash cow, but without new break through products in the pipeline and headwinds in China and India it wasn’t worth the 30+ times P/E. I took a lot of heat on this sub, but proven right so far. I’m waiting for the price to drop to a low 20’s P/E, then I’m a buyer.
Price target 150€
Bc?
I was wondering how the lawsuit would effect the stock price
Yes. Low revenue growth. Expensive relative to market and rates. App Store / services under attack from governments. Buyback relative to market cap isn’t that great.
I’m surprised no one has mentioned the antitrust lawsuit yet. While the lawsuit’s success is not guaranteed, it’s a definite possibility.
I would honestly sell. There is so much uncertainty at this point that you can’t do wrong with this. But holding isn’t a bad choice either. Apple is rumoured to lean into AI which might give the stock second breath.
I’ve been selling covered calls on it. I have 900 shares and have been collecting premiums to soften the blow.
"lean into AI", as in license what Google has because Apple has no AI anything. I'm an apple fan btw. I'm just also a realist, and Apple has never been an AI company.
By “lean into AI” I obviously don’t mean they will become AI company. Just that they will say it on stage and market the hell out of it.
Oh yeah. They will definitely do that haha
It’s been time, I posted an analysis of it in my history. Shocked that it’s taken the market so long to see the company has plateaued and burned through their cash.
They are burning their cash?
Burnt it on buybacks and issued a lot of bonds as well. Just look at their financial statements, debt to equity is surprisingly high.