Latest news with #WorldwideDevelopersConference
CNBC
a day ago
- Business
- CNBC
Jim Cramer is not giving up on Apple. Here's why
CNBC's Jim Cramer on Friday told investors that he's still pulling for Apple, even as its stock lags behind the averages. "If Apple can shake off its current shroud of negativity — maybe they make nice with President Trump somehow — I could justify paying 35 times earnings for the stock," he said. "Which is why I'm simply not ready to give up on this one." Cramer said he understands the current lack of enthusiasm for the iPhone maker. President Donald Trump is slapping steep tariffs on China, where Apple does the majority of its manufacturing. Trump has also said the company would have to pay a tariff of 25% or more if it were to make smartphones anywhere outside the U.S. — thwarting Apple's plans to dodge the new regulations by moving manufacturing to India. Some analysts have said domestic manufacturing would raise the cost of an iPhone by at least 25%, with one estimating a U.S. iPhone could sell at $3,500. Apple's recent Worldwide Developers Conference didn't "yield anything groundbreaking," Cramer continued, especially related to artificial intelligence. The tech titan also gave "tepid" guidance when it reported earnings last month, he added, and some on Wall Street are concerned as litigation regarding the App Store continues. However, Cramer said he's willing to stick with the company despite this uncertainty. He said he has faith in CEO Tim Cook, adding that tough times for Apple in the past have always proven to be great buying opportunities in hindsight. He reviewed the stock's performance over the past several years, noting that it has rallied hard after hitting bottoms. Cramer also said it's important to avoid looking at Apple's price-to-earnings multiple in a vacuum, saying investors should factor in its earnings growth rate. Money managers will pay up for growth, he continued, and he said Apple is expected to put up 14% earnings growth in the current calendar year. Meanwhile, he added, the S&P 500 as a whole is set to grow at a 9.4% clip. "There's clearly a point where Apple's stock becomes too cheap to ignore, and recent history says that's around 25 times earnings…that means down about 20 points from here," Cramer said. "I certainly don't want to see it revisit that level….but if for some reason the stock gets clobbered, you know what, let's back up the truck at $180." Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest The CNBC Investing Club Charitable Trust holds shares of Apple.
Globe and Mail
2 days ago
- Business
- Globe and Mail
Apple Continues to Expand Services Business: What's the Path Ahead?
Apple AAPL is continuously upgrading features of its Services offerings that revolve around the flagship device, iPhone. The company now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago. In the fiscal second quarter, Services revenues grew 11.6% year over year to $26.65 billion. Infusion of Apple Intelligence into Services offerings like Apple Wallet and Apple Music is expected to drive top-line growth. At its latest annual Worldwide Developers Conference, Apple announced expansion to the Services business with AutoMix and Lyrics Translation features in Apple Music. Sing will allow users to transform their iPhones into a handheld microphone for Apple TV, while preferred routes and visited places in Apple Maps make navigation easier for users. Apple Intelligence is now getting added to Apple Wallet, and users can make purchases with Apple Pay. Powered by Apple Intelligence, Apple Wallet can now automatically identify, summarize and display order tracking details from emails sent from merchants or delivery carriers. Meanwhile, Apple Pay expands the ability to pay with rewards and installments to in-store purchases for added flexibility and choice. The company also introduced an update to Apple Maps that helps users search and discover top-ranked restaurants, hotels, golf courses and more, with the addition of rankings and insights from expert sources. Per our model, Apple's Services revenues are expected to see a CAGR of 15.6% between 2024 and 2027. Apple Faces Stiff Competition Netflix NFLX and Disney DIS are major competitors in the Services space. Netflix is benefiting from its growing subscriber base, thanks to a robust localized and foreign-language content portfolio and healthy engagement levels with about two hours of viewing per member per day, indicating strong member retention. Netflix has set an ambitious target to double its revenues by 2030, supported by a diversified content strategy, including international programming, live events and gaming initiatives. Disney, on the other hand, has built up a massive global audience for its ad-supported streaming content. It has an estimated 157 million active users worldwide, 112 million of whom are of Disney's streaming platforms in the United States. Disney is benefiting from strength in Domestic Parks & Experiences revenues driven by growth at domestic parks, Disney Vacation Club and Disney Cruise Line. AAPL's Share Price Performance, Valuation and Estimates Apple shares have dropped 19.5% year to date (YTD), underperforming the broader Zacks Computer & Technology sector's return of 4.5%. AAPL's Performance Apple stock is trading at a premium, with a forward 12-month Price/Sales of 7.25X compared with the industry's 6.75X. AAPL has a Value Score of D. AAPL Valuation The Zacks Consensus Estimate for third-quarter fiscal 2025 earnings is pegged at $1.41 per share, unchanged over the past 30 days, indicating 0.71% year-over-year growth. The consensus mark for fiscal 2025 earnings is pegged at $7.11 per share, unchanged over the past 30 days, suggesting 5.33% year-over-year growth. Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Research Chief Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report
Business Insider
3 days ago
- Business
- Business Insider
‘Sell' Apple Stock, Says Top Analyst Despite YTD Underperformance
Apple (AAPL) stock is down 19.8% year-to-date and continues to lag behind both the broader technology sector and the Magnificent Seven stocks. Despite this underperformance, Barclays' top analyst Tim Long maintained his 'Sell' rating on AAPL, with a price target of $173, implying 13.6% downside potential from current levels. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Long is a five-star analyst on TipRanks. He ranks #165 out of the 9,646 analysts covered by TipRanks. Overall, Long boasts a success rate of 64% and an average return per rating of 14.4%. Notably, Long has maintained a Sell rating on Apple stock since January 2, 2024. Why Is Barclays Bearish on AAPL Stock? Long remains negative on AAPL stock because he believes that Apple's iPhones are no longer experiencing the growth they once did. Additionally, he is worried that Apple's Services segment is 'very concentrated and at risk.' Most notably, the analyst believes that Apple's other products have limited impact on the company's stock price performance. To sum up, Long's bearish view on Apple stock is based on the following three factors: iPhone sales are not experiencing significant growth Apple's Services segment is highly concentrated and faces elevated risk Apple's other products have only a minimal impact on AAPL's stock value The five-star analyst was also unimpressed by Apple's recent annual Worldwide Developers Conference (WWDC). Long noted that the changes to Apple's operating systems and the limited enhancements to Apple Intelligence will likely have little impact on Apple's future growth prospects. Moreover, Apple faces looming tariff threats as it continues to shift its manufacturing hub to India, despite repeated warnings from President Trump. Furthermore, Apple has indefinitely delayed the launch of its updated Siri version. These are the reasons Long believes consumers will not be motivated to upgrade to newer iPhone models this year. Is Apple Stock a Good Buy? Analysts remain divided on Apple's long-term stock trajectory. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 13 Buys, eight Holds, and two Sell ratings. Also, the average Apple price target of $230.77 implies 15.2% upside potential from current levels.
CNBC
4 days ago
- Business
- CNBC
Forget $100 billion buybacks. Apple must make a big AI move to turn its stock around
Apple is one of the greatest stock buyback stories in history. It's time to cut it. We have long been fans of Apple's repurchase plans in addition to the margin expansion attributable to strong services sales. The combination has supported earnings growth even when overall sales stalled. However, with shares down nearly 20% year to date, it's becoming clearer by the day that earnings growth predicated on buybacks is not what investors are looking for. What changed? It's all about the introduction of generative AI and the financially lucrative opportunities that comes with it. That's especially true when we consider that the addressable market for artificial intelligence is largely a result of technology's ability to disrupt certain markets — such as online search engines, for example, which is why we have seen shares of Alphabet become range-bound over the past year. Apple has a similar issue. Yes, its ecosystem remains incredibly robust with staunchly loyal consumers, but it's unclear whether that will continue to be the case should Apple fail to properly integrate artificial intelligence. So far, it has not. Apple's annual Worldwide Developers Conference earlier this month was underwhelming on the AI front. As we wrote at the time, we didn't expect much but were still disappointed . Jim Cramer has noted that Apple wants its products to be perfect before rolling them out, which has delayed the release of a fully artificial intelligence Siri that holds conversations and problem-solves on a human-like level. Sure, Apple launched a ChatGPT integration with Siri back in December. But the full promise of Apple Intelligence — the company's AI banner that was unveiled at last year's WWDC — has not been realized. Apple has been playing catch-up for a year, rolling out AI features piecemeal. On one hand, incremental AI rollouts have prolonged the iPhone upgrade cycle. On the other hand, however, how much longer can users and investors wait for the kinds of AI features that are becoming standard from mobile device competitors? While there are efforts to open it up, the Apple product ecosystem is largely locked down. A failure to offer up the latest and greatest AI solutions may well have users rethinking their options. We don't think we're there yet, but the patience of the consumer will only last so long, especially as more impactful AI solutions that really do change how we interact with our devices start coming to market. For this reason, we think it's time for a change when it comes to Apple's capital allocation strategy. As Jim put it during Tuesday's Morning Meeting: "They have to have an AI solution. They have to stop buying back stock. It's not working." AAPL mountain 2015-06-24 Apple stock over 10 years There is no denying the positive impact Apple's share repurchases have had over the past decade. The outstanding share count, which is what you divide net income by to determine earnings per share (EPS), has declined by nearly a third over the past 10 years. However, we're at a moment when investors care far more about gaining more clarity on the health of the company overall, for the long term, than they do about the low-single-digit EPS growth offered up by the repurchase program. As a company grows, the buyback has to either grow at a proportional rate or it simply becomes less effective. Indeed, from 2013 to 2021, the average share count reduction was just over 5% of total shares outstanding. Since 2022, however, shares have only declined by less than 3% per year, on average. That dynamic has led Wall Street to ask: Is Apple better off reducing share count by less than 3% on average, in turn boosting earnings by only slightly more than that? Or is it better off foregoing the EPS benefit and instead reallocating the billions of dollars being spent on buybacks toward acquisitions? Apple's stock performance versus the overall market screams for the latter. Apple should reduce the buyback allocation and start gobbling up AI companies and top engineers. Take a page out of Meta Platforms CEO Mark Zuckerberg's playbook and make jaw-dropping offers to the world's top AI talent. Perplexity AI is one that Jim called out a few weeks ago as being a good fit for Apple — and since then, several Wall Street firms have said the same. The latest is Bank of America, whose analyst said Tuesday that they see "many reasons" a deal would make sense. According to Bloomberg News, Apple has had internal talks about possibly buying Perplexity. However, the report made it clear that Apple has made no offers and has not spoken to the AI startup's management. The current valuation of Perplexity stands at about $14 billion. So, considering that Apple has authorized a $110 billion buyback this year, we see that it's well-equipped to start acquiring companies and keeping the buyback going at a smaller rate, if desired. With a valuation of $14 billion, Apple would presumably need to offer a premium. But even with a 50% premium, or a $21 billion valuation, it's clear that Apple has plenty of capital to get multiple deals done if it were to pull back on the buybacks for a year or so. Therein lies the beauty of the buyback. Unlike a dividend, you can pause a buyback for a year or two without panicking the shareholder base. A dividend cut, however, is generally seen as a bad sign in terms of financial health and management confidence in the business. Investors don't own Apple for its 0.5% annual dividend yield. Nevertheless, a dividend cut or pause at Apple would be terrible optics. If Apple were to resign itself to prioritizing the buyback over getting its AI strategy locked in, investors are going to increasingly start pricing the stock as they would any maturing company, with a lower price-to-earnings multiple. When you consider the headwinds facing Apple's existing offerings — tariffs on hardware and extended refresh cycles, along with efforts to open up the App Store to the detriment of services revenue growth, and questions as to Alphabet's right to cut $20 billion checks to remain the default search on Apple's Safari browser — it's becoming increasingly hard to argue against a lower P/E. However, if Apple were to pause the buyback for a year or two, freeing up some $100 billion to $200 billion in cash for the AI initiatives, investors would reward the stock. While not getting the roughly 3% EPS growth we have become accustomed to via the buyback, we are more than willing to bet that the multiple expansion resulting from the increased investor confidence would be worth it -- to say nothing of the potential acceleration in sales growth that an exciting AI strategy could unlock. (Jim Cramer's Charitable Trust is long AAPL and META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Indian Express
5 days ago
- Indian Express
Apple iOS 26 Beta 2: From Liquid Glass refinements to new Live Radio widget, here's what's new
Apple has launched iOS 26 beta 2, the latest version of its operating system for iPhones. Announced at the company's annual Worldwide Developers Conference (WWDC) just over a month ago, the latest iOS version introduces a redesigned translucent design language called 'Liquid Glass,' along with several other new features. Here's a quick look at iOS 26 beta 2. With the latest iOS beta, Apple has seemingly fixed one of the most annoying changes early adopters have been complaining about. Since WWDC 2025, several beta testers who have updated their device to iOS 26 have been complaining that the refreshed Liquid Glass made text in the Control Center hard to see and almost unreadable at times. Thankfully, Apple seems to have noticed the issue and adjusted the transparency for better legibility. Instead of a clear background, iOS 26 beta 2 now has a darker colour and more blur, which should help with readability issues. However, it looks like the user interface still needs some work when it comes to lighter backgrounds. In case you don't like the transparency, you can use the Reduce Transparency option under Accessibility in the Settings app to cut down on the translucent user interface. Coming to Safari, Apple seems to have repositioned the new tab button in the tab management view. Now, the '+' button to open a new tab can be found in the bottom left, like in iOS 18. The company is also adding a new Live Radio widget to its Music app, which can be helpful if you find yourself often tuning in to the service. The Apple App Store is also getting a new Accessibility section for product pages. However, developers will have to list the details and manually populate them. The Transcribe Calls option has now been renamed to 'Save Call Transcripts.' Also, Apple now says that participants will be informed with a sound before the process begins.
