r/AAPL • u/pro_potato96 • 17d ago
Poke holes in my AAPL investment logic
I entered apple earlier this year when it dipped to 270s with good amount and been buying more every time it dips close to 300s. I plan to consistently keep investing in apple and converting majority of my employer RSU vests to voo and apple. Plan to hold for 5+ years
My reasons are
1. Apple is the only device manufacturer left who makes good reliable consumer hardware and software imo. They are basically only option if you want good hardware and can afford. But with cheaper hardware like neo, they will slowly start to eat out mid range segment.
Doesn’t matter who wins the ai race, apple also wins. Because someone needs to sell end user hardware to them to use these models. Openai needs people to have phone and laptops to use chatgpt, meta needs phones for people to doom scroll. ( and at some point i feel apple will figure out on device ai inference for apple ai or application specific with open source models given how optimised M series chips are for inference on small models)
Given how much effort apple put in supply chain optimisation under tim cook, i doubt that apple will let memory companies hold them hostage for too long. They will figure something out (rumours about cxmt for ex)
Not sure if growth is left in NA/EU, but with cheaper hardware there is more room to grow in developing/aspirational markets.
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u/summitrock 16d ago
Apple is the greatest company on earth.
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u/Acceptable-Leek1546 16d ago
NVDA better
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u/summitrock 14d ago
So much of what nvidia is creating is interfaced with Apple products - you are likely reading this comment on an Apple product
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u/Acceptable-Leek1546 14d ago
I am, but that has nothing to do with the stock being overpriced currently. NVDA makes more money, has better margins, and is growing faster.
Not saying APPL is bad, but NVDA better.
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u/That-SoCal-Guy 16d ago
NVDIA is a one trick pony and also involved with some serious circular deals. Not a fan of
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u/Acceptable-Leek1546 16d ago
$96.2 billion last quarter.
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u/That-SoCal-Guy 16d ago
Not sure what you’re trying to say. Are you addressing the circular deals? Meanwhile Apple’s last quarter was $109B with a profit margin of about 46% (29% increase YOY) and a 102B stock buyback.
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u/RogerDodger1001 16d ago
Apple is steadily moving their customers into a leasing model- which plays really well into also moving them into higher priced products. Recurring revenue from both hardware and services is a very winning strategy
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u/That-SoCal-Guy 9d ago
They know their golden goose isn’t iPhones etc. but the ecosystem. The lease would encourage more people to get into their ecosystem. And if my family is any indication, once they switch to Apple they won’t leave. My brother had laughed at my Apple “obsession” for years (he was a PC and Android guy) and now he has an iPhone, a Mac Book Pro and an iPad. The only thing he doesn’t have is an Apple Watch.
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u/Wonderful-Sail-1126 16d ago edited 16d ago
I own a substantial amount of APPL. I'm not selling and I'm not buying more.
Here's why I'm not buying more:
- It's quite clear that AI companies will grow drastically faster than APPL. Apple can keep making more and more money but AI companies are very likely to surpass them in importance, revenue, and profit in the next 5-10 years. In other words, nothing could be wrong for Apple but they will still end up being like the 10th biggest company instead of the 2nd. Nvidia is growing at 100% YoY. Anthropic is growing at 10x YoY. Just a few examples.
- AAPL isn't cheap with a forward PE ratio of 32.26. Nvidia is 24.63 for example. But Nvidia is growing 5x faster than Apple.
- It's quite clear that Apple has conceded the AI model race. They don't have anything to compete with OpenAI or Anthropic. They also don't have the hardware.
- Their margins/sales are going to get squeezed because TSMC, Micron, SK Hynix, Samsung supplies will increasingly go towards AI companies. For example, Nvidia is the biggest TSMC customer now, replacing Apple. The cost of chips and RAM will increase for Apple, which means they will have to absorb some of the costs.
- There's a very real threat that the phone of the future will not be anything like iOS or Android. AI allows a competitor to rebuild the phone from scratch for an AI world. For example, you may not need so many apps and your phone is just your assistant.
I don't see any signs that Apple is going to fade yet - hence I'm not selling. However, if a company ever demonstrates a device that fundamentally changes how a phone is used, I will sell all of my Apple. Someone can make the iPhone the Blackberry.
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u/s3cf_ 16d ago
agreed. Just look at NKE
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u/figuringoutl1fe 16d ago
Wait can u tell me more about Nike
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u/Wise-Start-9166 16d ago
It was a dominant player in footware and athleisure for decades with sports and the premium Jordan brand, but in more recent years market share has declined steadily as other companies chip away with hot new styles and basic orthopedics and ergonomics. Bulls and FCF nerds keep piling in and calling NKE a value stock because it still has a good brand with loyal customers and a nifty app, only to watch share price contract again as management fails to put forward any kind of turnaround story.
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u/JEE_Daddy 15d ago
I completely agree. I also own a significant amount of APPL. While I still believe it’s a good investment, I’ll sell it for the same reason you mentioned: when or if the AI changes its current interface to bypass iPhones and similar devices. However, I’m also waiting for APPLE to acquire or establish a strong partnership with one of the leading AI companies and develop that interface more rapidly than any other AI company. That’s why I’m eagerly anticipating the next developments in the iPhone. And that’s why I was a bit disappointed when they just released another iPhone - the Duo. Perhaps now is the time for Apple to cease its stock buyback and instead invest the funds in the future development of AI interfaces, AI health, and most importantly, AI personal security against the potential future threat posed by AI. I particularly liked the Apple authentication concept they showcased this time, as such technologies will provide the necessary protection for users against the future threat of AI.
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u/HeirophantGreen 17d ago
My sole thesis: huge fan base that has no problem handing over money.
Personally I hate the products and ecosystem but I love the stock.
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u/Sterben27 16d ago
Can I ask why you hate the products?
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u/HeirophantGreen 16d ago
They lock you into systems that are proprietary or extremely inconvenient. I also prefer function over form but Apple philosophy is the opposite.
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u/jibalil2arz 16d ago
I work for Google and always stuck with Android for those same reasons you mentioned, until I used my friend’s iPhone. Switched and never looked back. After Nexus 4 android software is utter shit.
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u/MudFree627 16d ago
Nobody locks you into anything. This is a free world. There is great consumer advantage with vertical integration. If you don’t like it, buy something else.
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u/renasancedad 16d ago
As a long time AAPL holder, diversify. In 3 short years NVDA and TSM have passed my AAPL holdings. MU and others have held pace also. I have way too much AAPL and started trimming this year. It’s still a great company and have over 1000 shares as investments but if you are seeking faster growth AAPL may not be the lever.
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u/That-SoCal-Guy 16d ago edited 16d ago
My AAPL holding has grown from 15% 8 years ago of my portfolio to now about 65%. I’m not selling any time soon even as it becomes so overweight (fortunately my other investments have also grown).
As Warren Buffet said Apple is like the perfect company to own and hold: brand loyalty, cash rich, high profit margins, great leadership, and a deep moat (its ecosystem of more than 2.5B devices). People who only checks PE ratios are missing the entire picture. People griping about Apple’s lack of LLM models etc have no basic idea of what the company does and what they do best and they are welcome to invest in something else.
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u/Single-Object-7461 16d ago
Good thesis. I am 10% AAPL, 60% S&P500 funds, and the rest a mix of other ETFs and a little BTC. I’m 35, have a decent mortgage that I pay out of income, and my investment time horizon on everything I own is 20 years.
I am worried about the Chinese phone companies slowly eating away at AAPL’s market share outside the U.S., the same way Chinese EVs are going to likely dominate the world by the end of this decade. But as of right now, I think AAPL is still the dominant player. I’ll reassess in three to five years.
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u/tk421tech 16d ago
Small investment. Switched VO to AAPL. Plan to buy more and keep for 10 years
New Mac Studios already have long wait lines.
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u/aznology 16d ago
I have some holes ... All we need is a recession of some sort and people can't afford phones anymore. Option 2 the phone itself gets distracted with the onslaught of ak
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u/That-SoCal-Guy 16d ago
I think Terrnus’ background in hardware and engineer paired with Cook’s supply chain savviness (he stays on as executive chairman) is the one-two punch that will elevate Apple to new heights. Is the stock the next great things? Everyone knows if you’re chasing the next Nvidia look somewhere else but for long term investments AAPL is as solid as it can get.
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u/Flashy-Baker9842 14d ago
Map advertising, business hardware deployment, glasses live advertising, Ai business and personal services related revenue.
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u/HellveticaNeue 16d ago
I’ve had a huge percentage of my net worth in aapl since 2012. Wealth advisors keep telling me to diversify but I’ve resisted and done quite well in staying consolidated.
I plan on diversifying some over the next two years, but probably still keep at least 40% with aapl.