David Drinkwater on Apple's solid fiscal Q4 2026 in five easy charts - 'Yes, I think we are in simple agreement on this.'
on Apple's solid fiscal Q4 2026 in five easy charts - 'Amazon has large numbers of chips sitting in warehouses waiting to be put in servers for datacenters not yet built. And that is likely true of others. All the hyperscalers are going to the debt market to pay for the datacenters, with Oracle getting junk bond interest rates that it will have to pay off. Their credit default swap prices have skyrocketed, indicating that the fear of collapse is running higher. All those memory foundries (cough, cough, Micron) who have been getting ‘revenge’ on Apple will find themselves with useless contracts and unused capacity. Wonder what terms Apple will ask for then? And what happens when Apple uses the lower component costs to maintain margins by greatly reducing the costs of its products? How many devices are sold then?'
on Apple's solid fiscal Q4 2026 in five easy charts - 'Now we know why Apple raised prices. The supply chain that Cook was able to set up over the years has fallen victim to the AI memory debacle(probably one of the only things that Cook left unresolved for Ternus). Still, gross margins are pretty decent but will be a drag on earnings by comparison to previous quarters. If/when the AI demand issue slackens, Apple will be able to lock in better pricing and we should be seeing better margins. Until then, it will be important to watch the margins. If margins start to trend up, it may be a sign that the supply of memory is loosening up. As has been mentioned, I think Apple will be looking to hand it back to the memory companies. One of the other things that may be affecting margins are the new products. It can take some time for efficiencies of scale to kick in(but this too was made more difficult by memory pricing).'
on Apple's solid fiscal Q4 2026 in five easy charts - '” and hope that at end of day on Friday things make some semblance of sense.” Only a roll of duct tape around Trump’s mouth, for the next 3 years, could accomplish that'
on Apple's solid fiscal Q4 2026 in five easy charts - 'I went to one of those meetings years ago. On the steps outside the auditorium I met a woman who worked at Apple. I said to her, “I don’t own a computer yet.“ She said to me, “it’ll change your life.“ That it did.'
on Apple's solid fiscal Q4 2026 in five easy charts - 'Agree Fred, and sooner than later, that HBM memory purchasing is going to slow and slow drastically. If HBM memory prices start slowing or dropping, the value of the servers begins to degrade faster than expected. If datacenter capacity is overbuilt already, future capacity may be curtailed, accelerating memory purchasing and cost declines. All it takes is for one of the big 4-5 players to pump the brakes on AI spending and I envision a rapid, maybe cliff like decline. And if that happens, Apple will be there ready to use its cash flow to negotiate for sufficient memory supply to cover the next quarter or two, and awaiting even further declines to lock up more memory. The memory price hikes can’t last forever, especially as Micron will see some new capacity in 2028.'
on Apple's solid fiscal Q4 2026 in five easy charts - '@john What an amazing experience to have had…'
on Apple's solid fiscal Q4 2026 in five easy charts - '@Ben Steve could moderate himself when needed. Way back in the day I used to go to the shareholder meetings in the small theater on the old campus. Then the entire senior staff sat on stage and answered questions. As I recall Steve was always gentlemanly at those meetings. Wish they had shareholder meetings like that again.'
on Apple's solid fiscal Q4 2026 in five easy charts - 'Perspective on memory price impact: Maybe, and for some undetermined time, memory cost will impact Apple’s GM %. In contrast the hyperscalers, now pay, with debt, for the memory embedded in their data centers. I’ll take Apple’s approach – minimal impact to cash flow. (GM% can go down while GM $’s remain stable.)'
on Apple Earnings Smackdown: Final estimates Q4 2026 - 'Hi, Neal: “The gross margins guidance will be interesting.” There is, of course, that old Chinese curse: “May you live in interesting times.” It appears to have been apropos for this earnings call…'
on Apple's solid fiscal Q4 2026 in five easy charts - 'If the first rule of Fight Club (what are your future plans) is we don’t talk about Fight Club (we don’t talk about future products) why would you insist on asking about Fight Club? Earnings call Q&A is less than enlightening.'
on Apple Earnings Smackdown: Final estimates Q4 2026 - 'Guidance was actually LAME! I’m sure Apple has valid reasons but Wall Street will do what Wall Street does.'
on Apple Earnings Smackdown: Final estimates Q4 2026 - 'Gross margin 47.9% including 1% point from tariff rebates. Hmmm… Without tariffs, GM would be down well below everyone (on PED’s chart) estimates.'
