Apple

Trump’s mention of tariffs on Indian products rising “very substantially over the next 24 hours” (currently at 25%) could have an additional 4% negative impact on operating income if India raises tariffs to 50% and Apple fails to secure an exception to reciprocal tariffs. Ultimately, I expect cooler heads to prevail, with the Trump administration granting favorable tariff treatment to Apple and Nvidia, reducing the overall impact to de minimis.

Apple’s June quarter results and its outlook for September are the strongest in more than three years, yet the stock’s muted reaction underscores that it has become a show me story. Investors are worried the party will end as tariffs, regulatory changes, and Apple’s AI strategy come back to weigh on growth. I believe the disconnect between the fundamentals and the stock will be short lived. If Apple grows revenue in FY26 ahead of the Street’s 5.5% expectation, which I believe is likely, and they deliver a powerful new Siri by WWDC 2026, I expect AAPL’s multiple to rerate higher.

I expect Thursday’s earnings key takeaway will be September guidance in line with or slightly better than the Street. The iPhone business has stabilized, and the iPhone growth bar in September is low, calling for revenue to be down about 1% y/y. The upcoming iPhone Air hardware redesign should provide upside to iPhone growth in FY26. The favorable fundamentals should outweigh the headwinds of tariff uncertainty that will remain. As for AI, the bar is low for the next year.

Jeff Williams’ retirement marks the end of an era for Apple’s operational leadership, given that he has been with the company for 27 years, 10 of those as COO. Given the recent challenges with AI, some might interpret the news as evidence that Apple’s leadership is struggling. However, I believe this is a well-orchestrated changing of the guard. New COO Sabih Khan, who joined Apple in 1995, and likely future CEO John Ternus, who joined in 2001, reflect continuity and deep institutional knowledge. Steve Jobs wrote the book on leadership transition, one that Tim Cook continues to implement with precision.

The prevailing narrative around Apple’s AI efforts is that the company may not be moving fast enough to meet its goal of launching a new Siri by next spring. However, Mark Gurman’s recent report suggests Apple is determined to deliver by considering hitting the reset button on Siri by partnering with companies like OpenAI or Anthropic, or potentially acquiring Perplexity. This more aggressive approach is encouraging for AAPL investors, as it signals the company understands what’s at stake and is willing to think outside the box to get there.

All that matters for Apple’s AI is this next version of Siri, which we should see by June of next year. We know the current Siri is well behind ChatGPT and wanted to quantify that gap. We tested the two and left with a new perspective: Siri isn’t an AI assistant. It is still just a voice-activated search tool. The combo of Siri and ChatGPT improved the quality of the results, but it took on average 5 to 10 seconds, underscoring one challenge of leveraging a third party LLM.

Apple’s AI strategy is becoming more clear. They’re taking a measured approach — they held off on announcing any big AI advancements, stoking concerns that Apple doesn’t get it. They get it, and they have elevated next year's release of a new, supercharged Siri as the critical test of their AI chops.

We expect this year’s WWDC two biggest announcements will likely be a new look to OS and opening more AI models up to developers. This will leave some investors wanting more in AI, asking how much time the company has before it begins to lose customers. The answer is that they still have a couple of years to get it right, but to do so, they will likely need to increase their AI related investments.

Every now and again, innovators share a behind-the-scenes look at their work. Sometimes these breadcrumbs lead us down a dead end; sometimes, however, they lead us down a path of transformation and revolution, a permanent path that forever changes the…

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.