Research archive for AAPL

Here's another 3rd quarter earnings update from one of our core portfolio stocks. Apple delivered record sales of $102.5 billion, up 8% year-on-year and ahead of expectations. Earnings per share came in at $1.85 versus an anticipated $1.77. iPhone revenue rose 6.1% to $49 billion, slightly below estimates due to supply constraints rather than weak demand, with most buyers opting for the high-end iPhone 17 Pro models.

Apple is still at heart, a hardware business. According to reports, they are looking at a new line of AI powered home devices that includes a tabletop robot which looks like an iPad with a motorised arm. Interesting.

Apple has quietly pulled off one of the most impressive moves in corporate history. Since the early 2010s, Apple has reduced its outstanding share count by roughly 44% through aggressive share buybacks.

Last week, Apple reported one of its strongest quarters in three years thanks to a solid beat in iPhone sales. Revenues were up by 10%, crushing the street's expectations of 4% growth. Tim Cook said overall revenue in the current quarter will rise by about 8%, which is pretty good. iPhone sales brought in 13% more in Q2, and services was also up by 13%.

Apple is looking into buying AI search startup Perplexity, as it scrambles to close the gap with rivals in the generative AI race. Senior execs Eddy Cue and Adrian Perica have reportedly held internal talks about acquiring the company, which recently hit a $14 billion valuation after handling 780 million queries in May.

A few publications have covered Apple's current AI efforts, including Siri's big AI upgrade taking longer than expected, and the market's growing impatience.

Apple's future profit growth will likely come from their services business, where they charge app developers a percentage of any in-app purchase. Their argument is that they provide a safe platform, and a massive user base. However, Apple has lost a few court cases about their app store payment arrangements being anti-competitive, and it may well be forced to open things up.

Apple released results last week, which were broadly in line with analyst expectations. Apple's size and momentum make its results fairly predictable. Revenue for the previous quarter was $95 billion, up 5%, resulting in profits of $25 billion.

After spooking markets with a wave of heavy-handed tariffs, Trump has backpedaled and further excluded a bunch of tech gear like smartphones, laptops, semis, and solar panels from the eye-watering 145% tariff hike on Chinese imports. The move is being spun as a strategic push to give companies time to shift manufacturing to the US, but let's be honest, it probably has more to do with the $640 billion Apple selloff and tech stocks bleeding out.

Apple has refreshed its iPad lineup, introducing a new iPad Air with the M3 chip, a redesigned keyboard, and an upgraded entry-level tablet. The latest iPad Air, available in 11-inch and 13-inch sizes ($599 and $799), now runs twice as fast as the M1 version. AI tasks also perform 60% faster than the 2022 model.

Last week, Alibaba announced that it is partnering with Apple to roll out the latter's AI offering in China. Given how politically sensitive data processing and AI capabilities are at the moment, it makes sense that Apple has chosen to partner with a local company. It is interesting that they aren't partnering with DeepSeek.

As previously noted in this newsletter, Apple and Starlink are teaming up. This is a very exciting development.

Apple's latest quarterly numbers were solid. Total revenue grew 4% to $124.3 billion, beating estimates, notwithstanding iPhone sales being 1% softer at $69.1 billion.

Having a large user base has many advantages. Consider Apple, who have over 1 billion loyal clients. A service called Apple News already has over 125 million monthly users in the US, Canada, UK and Australia.

Apple is set to elevate its Apple Watch Ultra with satellite connectivity in 2025, allowing off-grid messaging without a phone. The feature, leveraging its partnership with Globalstar, builds on Apple's satellite innovations first introduced with the iPhone 14. Shares of Globalstar jumped 15% on the news.