Apple

Jony Ive and Sam Altman are making a bold attempt to create an AI-native, screenless computing product lineup that could change how we interact with technology. Ive appears motivated in part to reverse screen addiction and envisions a family of ambient computing devices that fade into the background while putting advanced intelligence everywhere. If successful, the products collectively could equal a few hundred million units a year, compared to the iPhone at just over 200m. Apple’s core business will likely not be threatened, given Ive's vision appears to sit alongside of and beyond the Mac and the iPhone. And any success he might have will likely motivate Apple to enter the space. Google faces more disruption if AI-centric gadgets divert users from the screens they use for Google searches today.

Since Apple Intelligence launched last fall, the company’s AI efforts have mostly amounted to a string of setbacks. The biggest one? The full suite of Apple Intelligence features still hasn’t rolled out and likely won’t for another nine months. That…

There’s a shift underway in how people use search and it’s not going in Google’s favor. Last quarter, 56% of total revenue was from Search, and I estimate the segment accounts for 90% of profits. The company is still dominant, but their Golden Goose is falling ill. From Eddy Cue's comments at the Google trial, Apple is seeing declining Safari searches (Google) to rising AI competition, the headwinds are real. The stock may look cheap, but without a clear plan for navigating the post-blue-links world, it's likely going to get cheaper.

While the headlines around Eddy Cue’s testimony sparked concerns about Apple’s reliance on Google Search (shares of AAPL closed down 1%), the financial reality is less alarming. The Apple-Google Search deal contributes roughly 15% to Apple’s operating income. If that revenue were lost or reduced, Apple has several alternatives, including deeper integration with AI partners like OpenAI, Perplexity, and Anthropic, or even launching its own search product within Safari. My biggest concern is that this introduces a new risk factor into the investment case - one that may take time to fully resolve.

We evaluated AI’s staying power based on March earnings from key tech providers. Growth rates are not slowing as quickly as many investors had feared, suggesting that AI’s momentum remains intact. Concerns about the pace of improvement in AI models may actually strengthen the case for increased investment. Fundamentals and the outlook for AI growth and investment are either stable or improving compared to three months ago — despite ongoing uncertainty around tariffs, macroeconomic conditions, and the speed of model innovation.

Apple’s March results and June guidance underscore the company’s fundamental strength. However, Cook’s uncertainty about the business in the back half of this year tempered enthusiasm, and shares sold off about 4%. As for tariffs and the supply chain, the company is taking proactive steps to navigate the storm. Bottom line: while you can’t count on the macro, you can count on Tim Cook to make the right decisions for both the near and long term.

Apple’s March earnings stand out as a uniquely forward-looking moment in my 20+ years of analyzing and investing in the company. The focus will be less on the quarter’s numbers and more on the company’s comments about its long-term positioning in four key areas: Tariffs, manufacturing in China, demand in China, and Apple Intelligence.

This year’s shareholder meeting had a scripted tone, offering no new business updates. Gone are the days of free-flowing Q&A sessions that once made headlines. This shift has transformed the meeting into a forum aimed at aligning investors with the company’s vision. Apple’s focus remains unchanged: building the world’s best devices and services while integrating AI into its core. The market responded positively, with AAPL shares finishing the day flat, compared to the Nasdaq, which closed down 1.3%.

Apple is increasing its U.S. investment to $500B over the next four years, boosting annual spending by $39B compared to its 2021 commitment. However, the company was likely on track to increase spending by $20B annually to support natural business growth, meaning the true incremental investment is around $20B per year. The investment is the right move as it nearly eliminates tariff risks while expanding data centers, building a new manufacturing facility in Texas, and supporting AI infrastructure for Apple Intelligence.

Deepwater’s second annual Frontier Tech Survey measures the American public’s viewpoint on emerging technologies, including AI, Electrification & Automation, the Creator Economy, and Relationship with Tech. Key Takeaways: AI – General usage is increasing but we are still early in the…

Apple's reported partnership with Alibaba to bring AI to China alleviates some of the headwinds Apple has been facing in the region for the past two years. Apple’s path forward in China will depend on how well it integrates AI into its devices, navigates growing nationalist sentiment, and adapts its pricing strategy to match shifting consumer behaviors.

Apple’s September quarter results reflected stronger than expected iPhone sales and gave guidance for December that suggested top line growth will essentially be unchanged from September. In other words, Apple Intelligence will not accelerate growth in the December quarter, a reality that is disappointing to the "iPhone supercycle" camp. I believe once these features are in place, and available worldwide, the supercycle will begin, likely in the Jun-25 quarter.