Toni Sacconaghi's Apple mea culpa — full text

"We have been neutral on Apple this year, and it’s been the wrong call. We missed it."

Transcribed from the full CNBC Pro version of Monday's interview with Bernstein's senior technology research analyst::

Jon Fortt

You say Apple, but you have been kind of behind on Apple for much if not all of the year. Right? Are you changing your tune on that stock in particular? Were you wrong? What were you wrong about? Or do you still think that it’s at the high end of the range it’s been trading and investors should be cautious about that too? Because you seem to be saying both things.


Yeah. No. Very fair point. So, look. Let me underscore. These are … we run quantitative screens… there are probably 25 names that fit these criteria and Apple happens to be one of them.

We have been neutral on Apple this year and it’s been the wrong call. We missed it. I think anticipation for 5G plus continued success in Services have propelled that stock higher and my guess is that over the next six months the stock could continue to go higher based on those tenets and based on the fact that, again, from a quality perspective  — which is something we think the market is seeking in a time of high market valuation and uncertainty — Apple has that in spades.

But, to answer your question, we missed it this year.

My take: Kudos to Fortt for holding Sacconaghi's feet to the fire. And to Sacconaghi for taking it like a man.

Note to Apple 3.0 free riders: To get that quote, I spent $29.99 for a monthly MSNBC Pro subscription. Just saying.

See also:


  1. David Emery said:
    Michael Thompson’s posts go to the heart of the problem. Toni has gotten a free ride for being demonstrably and factually WRONG for multiple years, in both his statements and his target prices.

    December 18, 2019
  2. Jerry Doyle said:
    I did not know about the interview with John Fortt. I heard Sacconaghi’s mea culpa in his earlier interview Monday morning with Carl Quintanilla on “Squawk on the Street,” as I transmitted to PED and he subsequently mentioned it to the forum.

    It looks as if Toni is seeking redemption by purging with key television WS personalities in ceremonial amends. I assume that the good man chose this path in hopes of getting back in CNBC’s good graces as an Apple analyst expert.

    One does need to give Toni credit for his new found spiritual edification in understanding his Apple shortcomings and perhaps absolve him, but not restore him to his former expert Apple status.

    Now if only Jun Zhang finds renew spiritual Apple awareness and edification to seek repentance.

    December 18, 2019
  3. Mordechai Beizer said:
    And that’s why I subscribe every year, so that I don’t have to spend $29.99 per month. Thanks PED.

    December 18, 2019
  4. Kathy Corby said:
    Thanks for blowing the big bucks on us, PED. We owe ya. (Paid sub…)

    December 18, 2019
  5. Kirk DeBernardi said:
    As an investor, the nugget I’ve learned by following analysts is…

    …don’t follow analysts.

    Sign me.

    December 18, 2019
  6. Dave Ryder said:
    If you’re an AAPL investor and read this site please be sure you are also supporting PED.
    (Paid subscriber here)

    December 18, 2019
  7. David Baraff said:
    If you can post a comment, aren’t you by definition a paid subscriber?

    December 18, 2019
  8. Gregg Thurman said:
    If Apple 3.0 has value (I think it does) there shouldn’t be a “free” tier. There should be a limited time trial offer, but not “free”.

    In my opinion Apple 3.0 loses nothing by eliminating the “free” tier, just a bunch of takers unwilling to contribute financially (its $10/month for Christ’s sake) to support a spam/troll free site of unusually high quality.

    Sign up, pay the fees or get lost.

    December 18, 2019
  9. Fred Stein said:
    The services story was obvious a year ago, as many of us have noted.

    5G is over-hyped. The big story is wearables, and some specific services like Pay, Arcade, TV+, and health. TV+ and health can’t be tracked in any meaningful way, yet.

    December 18, 2019
    • Aaron Belich said:
      Looking forward to future network and home audio changes as well.

      Multiple Homepods, mesh Airports… AR/VR audio/video support, there’s a lot of stuff that can improve upon if they haven’t already, just don’t have it ready for prime time yet.

      Muscle tracking can be added to a higher level watch… oh, was that a controller you were holding, now your whole hand, fingers, and the finger pressure applied is the controller.

      A fascinating future coming soon.

      December 18, 2019
  10. Gregg Thurman said:
    Apple has just recently dipped its little toe into health, yet this is the one item that TC repeatedly says will be Apple’s greatest achievement.

    Given TC’s repeated statements regarding Services (that came true within his time frame) I have to believe that he knows better than any follower of “quantitative screens” (aka algorithms) what is in store for Apple.

    On a side note: it should be noted that Apple expenses all of its R&D expenditures. Trump’s tax law requires that all R&D expenditures, starting in 2022, be capitalized. The effect on Apple’s Income Statement will be a significant reduction in R&D expense and increase in operating income. It will take about 5 years (2027?) for amortized R&D expenditures to approximate current R&D expenses. In the interim EPS will get a boost from the accounting change.

    December 18, 2019
    • Fred Stein said:
      Yes, we agree on the health biz opt. It is amazing (or maybe not) that nearly zero analysts mention this.

      On the R&D tax treatment, thanks for the info. Very helpful.

      December 19, 2019

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