There are still a lot of uncertainties.
NVDA is up today. The reason is that TSMC produced more AI chips for NVDA than expected. In Q1 and in April (up to now), NVDA is the largest cumstomer (Not AAPL!!!).
It clearly shows for Apple that the demand is weak.
Their new iPad models were supposed to be launched in March 2024, but it has been delayed.
Now, there is a rumor that new iPads will be launched in May. I suspect that Apple can´t fix their software problems.
Therefore, I expect from their next earnings on the 2nd of May 2024 that their iPad revenue will be a disaster.
Their Mac business should be "ok" with their M3, but there are several estimations that there is no significant growth YoY. Some reasearches estimate their growth at 2.5%.
I don´t know if it is true. But given the fact that a lot of consumers don´t spend too much, I would not wonder if their sales are disappointing.
iPhone… The same story as Mac. A lot of consumers don´t spend on electronic goods. They are quite expensive. The inflation is killing most of us.
Apple is screwed up in China. Their sales are declining YoY.
I don´t expect a surprise in China.
Service should do well, but it does not justify the current valuation.
Apple is still valued at 26x FWD PE and competes with MSFT, AMZN, META, NVDA, GOOGL as Apple is valued as a software company, but I don´t see Apple as a software company.
For me, Apple is still (mainly) a hardware company.
Would you justify the current valuation although there is no growth?
Last year, their FCF was down YoY. Their buyback was down (but still massive).
If their revenues continue to decline, I expect that their FCF will show a decrease as well.
Their EPS can rise thanks to their buybacks. But Apple needs to find out how to generate a double-digit growth rate like MSFT.
For the next two quarters, I expect that Apple´s revenues will decline or will be flat at best.
It depends on iOS18 and iPhone 16 if Apple can bounce from September 2024. But again, it would mean that Apple is dependent only on iPhone again.
There are several questions, which need to answered to clear some uncertainties:
- What is the outlook in China? (I guess this question will be asked by some analysts).
- What is their AI strategy? (I guess we will have to wait till WWDC 2024).
- What to expect with the DOJ lawsuit?
- What to expect from the EU?
- What impact do we expect for their AppStore revenue in the EU?
You don´t have to be Tim Cook to understand that those questions can´t be answered right now.
I doubt Tim Cook can give more pictures when analysts ask these questions on the 2nd of May 2024.
As these uncertainties remain, I would not be surprised if their stock will dip after their earnings (~ -10%??)
Recently, I get a lot of bulls*it rumors that Apple is working on ring, robots, airpods with camera etc.
But those rumors are reported on weekly base.
This is a very strange move. I get the feeling that Apple fires such rumors to remain relevant on the stock market.
The AVP is an over-engineering product and a very "un-Apple" product. Most consumers don´t need them (yet).
This is no secret that Tim Cook urged to launch the AVP earlier than expected as he got a pressure due to the underwhelming stock performance.
But the AVP failed to deliver.
I think this is a real challenge for Tim Cook now.
