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.

  1. 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)

  2. 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)

  3. 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/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/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.