META - Apple: Chances Of AI Success

2024-07-03 04:34:47 ET

Summary

• Apple's new Apple Intelligence features could prompt many users to upgrade their older models, potentially driving a major sales Supercycle.
• Despite higher PE ratios (34X vs. pre-pandemic 15x), Apple's valuation reflects strong fundamentals and growing service revenue.
• Increased R&D spending, especially on AI and VR, could yield long-term benefits, but investors might want to continue watching the impact on profitability.

Investment Thesis

My iPhone X, which I purchased in 2017 when Apple ( AAPL ) (AAPL:CA) first rolled out the face recognition feature, has been with me through thick and thin. I did change a broken screen a few times, and at one point, my insurance got me a replacement; a refurbished iPhone X, but thanks to the magic of iCloud, it kept its essence, maintaining the settings, apps, photos, documents, etc. of the original iPhone....

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