Apple

Apple delivered a solid March quarter and guided June revenue 7% above expectations. The stock reaction, up 4%, was muted relative to the guide, which reflects a concern that the June quarter is the last quarter of the latest iPhone supercycle. The good news is the Street is already reflecting a slowdown in iPhone in FY27 to 6% growth from an average of 20% from Sep-25 through June-26. The bigger question is, can Apple Intelligence, starting in the form of a new Siri, which rolls out later this year, break the iPhone supercycle narrative and drive incremental revenue starting next year? I believe the answer is it can. If successful, that will likely rerate AAPL's multiple.

Investors knew this was coming, as evidenced by AAPL shares being down only 0.5% on the news that Cook is moving into the chairman role. This opens the door for a new investor conversation around Apple and AI. Fifteen years ago, Cook began to orchestrate an AAPL multiple re-rating around Services that started with a new narrative. I expect Ternus will take a page out of that book and shift the stock narrative to show that they can win in AI. I'll be watching for success with the new Siri later this year, additions of leadership from AI-first companies, and maintenance of their gold standard culture around product quality as evidence that it's working.

Apple’s product updates this week accomplished two goals: lifting revenue for the June quarter by 2%. It also demonstrates the Company's an ability to protect gross margins despite a tougher memory cost environment. We now forecast June growth of 10% y/y (Street at 8%) alongside slight upside to margins. Beyond June, while the new MacBook Neo should contribute a steady 1% to sales, with the initial tailwinds from the iPhone 17e and MacBook refreshes are expected to normalize toward neutral.

Shares of AAPL are not getting the love they deserve, up only 1% on impressive December results and guidance. I would have expected them to be up 5% or more after the report. I believe the muted stock reaction is largely because investors want more clarity on when and how AI will impact the business. History suggests Cook will deliver the AI goods in the form of the first must have AI devices, likely starting mid to late this year. In the meantime, investors can sleep well at night knowing Apple’s customers remain loyal.

It's becoming more clear that demand for the new iPhone Air is soft. Recent third party estimates suggest the new form factor accounts for around 5% of iPhone sales. Before it went on sale, I and the Street had estimated it would account for 15% of sales. Despite that headwind, the iPhone is growing at its fastest rate in four years, largely thanks to a massive upgrade pool showing up, albeit nine months late.

Apple’s September iPhone numbers missed expectations, rising 6% year over year compared to expectations of a 10% increase. That negative was more than offset by positive guidance, which implies iPhone growth in December will be closer to 12%, versus expectations of 6%. Clearly, iPhone is on a roll. After December, it will have averaged 10% growth in each of the past three quarters, compared to a 0.5% decline in the two years prior. I expect that momentum to carry into mid-next year. Now, the focus increasingly shifts to the high bar set for the new Siri, expected around April of next year. Anticipation of that release should move shares higher.

Here are the five pressure points for this Wednesday and Thursday’s earnings from Google, Meta, Microsoft, Amazon, and Apple (and an Nvidia bonus). Big picture: The setup carries more risk than it did three months ago, as investor confidence is notably higher heading into this round of reports. That said, the key takeaway will likely remain that we are still in the early stages of AI adoption, and the largest technology companies continue to hold their ground.

We’re now three weeks into the iPhone 17 cycle, and investor sentiment remains upbeat despite the October 3 Jefferies downgrade. Since launch, the global lead time data reinforces this optimism: wait times suggest demand is running modestly ahead of last year. Together, these datapoints support the case that iPhone unit growth will return next year, modestly exceeding the Street’s 5% growth consensus.

Apple’s decision to shelve Vision Pro in favor of glasses underscores that the optimal AI-first form factor is still unsettled. Apple is now following Meta’s push into glasses, while Jony Ive joined OpenAI in May to pursue a different path: a screenless pocket companion. I believe the phone will remain the dominant AI-first device over the next three years. Beyond that, the shift will move toward pocket companions that work alongside phones and watches. Glasses, despite Apple’s pivot, are likely capped at a few hundred million units a year, limited by comfort, privacy, and fashion.

We’re just one week into the iPhone 17 cycle, and investor sentiment is upbeat on the prospects of the iPhone returning to 5% growth in FY26. Early global lead time data reinforces this optimism: wait times suggest demand is running modestly ahead of expectations. Together, these datapoints support the case that iPhone unit growth will return next year, modestly exceeding consensus.

Apple may be exploring an investment in Intel (source: Bloomberg), but I believe the strategic benefits are limited. Over the past five years, Apple’s product strategy has moved decisively away from Intel and toward custom chip designs manufactured by TSMC. I see the only rationale for Apple to invest as political goodwill.

Over the past year, Apple may have stumbled on AI, but they continue to lead when it comes to hardware. My sense is that the iPhone 17 will exceed investors’ expectations, proving that a compelling iPhone in hand is worth more than the promise of Apple Intelligence. This sets the table for iPhone upside over the next year.