From Erik Savitz’ “Apple Reports Earnings Tuesday. Why the Market May Already Be Looking Past Them.” posted Monday:
Apple shares recently surged to new all-time highs, amid heightened investor anticipation of June-quarter earnings, due after the closing bell on Tuesday. But it’s the launch of the next generation of iPhones, expected to be unveiled in September, that might be the real difference-maker.
Apple’s recent rally has not erased concerns about the stock. Growing regulatory scrutiny of Big Tech generally and Apple (ticker: AAPL) in particular, with a specific focus on the fees Apple charges developers who distribute applications on the company’s App Store for iPhones, iPads, and Macs, is the obvious one. There are also worries about tough year-over-year comparisons, and some investors fear that the recently robust growth in Mac and iPads sales will slow as the economy returns to more normal conditions. Others are nervous that the next set of iPhones will provide only incremental improvements, and that demand could disappoint.
But no one seems to be too worried about the earning themselves. The Wall Street consensus for the fiscal third quarter is for $72.9 billion in revenue and profits of $1 a share. Even analysts who are cautious about the stock think those numbers are too low.
My take: Looking past earnings? It was always thus.
As for iPhone demand, well major parts of the world are still recovering and certainly the US and Europe are still ramping up economically. With Covid still being somewhat of a damper, economies should still have a ways to go. Combine this with better and better 5G services, the allure of 5G will continue to boost iPhone sales. If and when Apple introduces a midrange model iPhone SE 3 (slated for 2022) with 5G and an A15 chip at $400-450, it would be a huge seller for price sensitive markets. And of course, services revenue follows.
It hasn’t worked out badly for Apple so far and it won’t be an issue if they don’t provide guidance again. If we are as patient as they are, we will arrive at the same conclusion as Apple management – Apple and AAPL will still relentlessly forge ahead, with or without the market understanding it well and how Apple runs its business. Last month’s smackdown showed just how poorly pro analysts were at understanding what has been happening in Apple’s markets. I expect more of the same with tomorrow’s estimates.
Besides, Apple will still get buyback shares at undervalued prices.
“That begs the question, “What defines the end of the epidemic?””
It’s estimated that Covid19 has killed somewhere between 4 and 8 million people thus far.Discounting the HIV/AIDS pandemic that had killed 35+ million people as of 2018, the Spanish flu epidemic of 1918, which killed 17-100 million people, is probably the closest “fit” for what’s happening today. But back then, the world population was about 1.8 million. That’s less than a fifth of today’s population. What we’re seeing is a disease that’s “washing” through an immense population, especially in poorer countries, and gathering mutations in the process. It’s not over yet.
How does this impact Apple? Hard as it is for some folks to get through their thick skulls, Apple is a lifeline during a time when lifelines are exceedingly important.
Expectation about a great report tomorrow helps, and rightly so. The rest of Eric’s concerns are just rehash.
I’m not seeing it in the options market. Normally a contract sells at the mid-point between Bid and Ask. Today the Sellers are holding out for their Ask, and getting it.
So far this session I have watched AAPL decline until my contract offer exceeded the mid-point but 2c, and still it wasn’t executed.
July 30 highest Open Interest is the $150 Call carrying an implied break even of $152.60 price.
Savitz’ article is hogwash filler because he’s paid to write SOMETHING, evidence notwithstanding.
Wait, I can’t forget Apple’s up 60% over the past 12 months (with viral headwind) or 14% YTD or 456%/5 years. Phenomenal growth rates in certain lines such as App Store, Wearables and iPad are real. Those numbers & products/services delivered speak volumes that cannot be ignored. It’s impossible for me to stop thinking long. Short-term perspectives only introduce illogical dissonance used to sell opinions. Unreal.
$150 now. 200 1Q 2022. Bumpy in—between.
Intuition + Research + Demand
If the market responds as before I have less than half my investment budget at risk, thereby limiting my downside, with the possibility of re-investing at a much lower Strike. I may even make a profit for the week.
July 30 $149/$150 @ 49c
Ordinarily I would tried to purchased July 30 $145/$146 (based on intraday low) @ ~65c, but AAPL rose way to fast to get my order in.
Apple has successfully navigated dark clouds and prepped for darker clouds.
The forever doom and gloom crowd will hang over $AAPL in perpetuity as Apple slowly open the floodgates in India to a rising middle class over the next two decades, potentially +750 million new AppleID’s. And Toni-Sacconaghi-styled-analysts will be shocked when the next super-cycle is upon us all. It doesn’t matter if it’s iPhone 13 or 16 or somewhere in between. And that’s just with current personal computing tech. Wait till Apple simplifies the next big leap in tech that the next MSFT, Qualcomm, Sony, Facebook, or whoever, releases over-complicated and bloated with excess. Or perhaps it’s right in front of us and we don’t even realize it, looking at the pros and cons of social media and what Apple is doing to dismantle it for just the best parts.
Apple’s future is so much brighter than many realize.
PED’s quip, “It was always thus.”
Kinda sums up the bane of investing in AAPL, doesn’t it?
(…he said, heaving a huge sigh.)