Companies

Apple raising the monthly price of Apple TV+ by 30% is a small example of a bigger opportunity for the company: increase revenue per device from more subscriptions, and services and hardware price increases. I believe investors will increasingly focus on that metric as a barometer for the health of the business. Horace Dediu from Asymco estimates the average revenue per device per day is $0.47. I estimate the Apple TV+ price bump (Apple One price did not change) in the U.S., U.K. and Canada will increase average revenue per device per day from $0.47 to $0.4704. That is about four tenths of a cent increase per day. This would also add about $430m in high margin revenue, which would increase overall revenue by about 0.1% next year (The Street is looking for $435B) and earnings by 0.2%.

The Grinch's rant about hating "the noise, noise, noise" will resonate with Nvidia investors next week. This quarter will have a lot of noise, much of it around how much of the China H20 catchup will be softened by Lutnick insulting China leadership, when a separate China chip based on Blackwell be available, and how the U.S. 15% China revenue share will impact margins. Cutting through the noise, the likely takeaway will be that Street growth rates for calendar 2026 are too low. The Street is currently expecting 27% top line growth next year compared to 55% this year. I expect the Street will revise the CY26 outlook to up 30-35%.

I believe Nvidia can maintain gross profit dollars on its China business (13-15% of revenue) despite the revenue-sharing arrangement with the US government, because they should be able to raise prices by about 18% without hurting demand. This likely settles the China discussion until Nvidia releases a scaled-down Blackwell chip for the Chinese market, an area where Trump has left the door open for changes to revenue share percentages. The biggest remaining question is what this means for Tesla and Apple.

Credit to Google, their AI strategy is working, as evidenced by queries up 10% y/y in June. I estimate that’s in line with query growth in CY22, before AI took off. Under the hood, the company is running a two-product AI strategy: Search and Gemini. Within Search, they have traditional Search, AI Overviews, and AI Mode. That means when it comes to finding information, users interact with four Google surfaces. I believe this disjointed approach falls flat compared to the new ChatGPT simplified interface. In May of next year, I believe Google will combine its three surfaces into one, creating a Search experience that is uniquely Google.

Apple's incremental $100 billion investment in the U.S. marks a return to the pre-tariff status quo at the start of the year. Credit Trump for returning to be supportive of Apple and credit Cook for navigating a stormy seven months. In the end, Apple will spend more with U.S. suppliers, continue to assemble phones in China and India, which means it's unlikely prices will go up on account of this deal. Margins should remain stable, and Apple investors can sleep better at night knowing the tariff risk appears off the table for the next few years.

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.

This is the first in a two part series examining the future of Google Search in an AI first world. We present findings from our study of 200 queries designed to better understand how Google is using and monetizing AI Overviews and AI Mode. The second report coming out on later this week, will look at what Google may be developing next to help save and potentially advance Search.

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.

Meta's blowout quarter was the best example to date of AI having a tangible impact on revenue and earnings growth at scale. The question of whether AI has an ROI can be put to rest. Going forward, Zuckerberg is staking a claim to superintelligence, a dynamic in AI that experts debate in terms of feasibility. If he nails superintelligence, Meta shifts from an ad company to an AI powerhouse.

Tesla’s chip deal with Samsung underscores how far ahead it is of traditional car makers when it comes to building physical AI and the long game of autonomy. The AI6 chip (Hardware 6) should ramp in 2027. As a reminder, the company is expected to ramp A15 (Hardware 5) next year. While more powerful hardware is always better, the deal with Samsung raises the question: is Tesla signaling that the breakthrough moment in FSD will be powered by the A16 in 2027? The question comes from the reality that Robotaxi in Austin and the Bay Area remain limited in scope, likely because of the number of interventions in Austin. I expect the stock will trade on concrete signs of progress, including expansion of the service area, number of vehicles, or moving from private to public availability.

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.

Shares of GOOG are up 1.5% following the June report, which showed that Search is holding up well against AI disruption. I expect in the coming weeks investors will gain more confidence that Google has a couple of years to figure out monetization of AI Mode. Separately, Google Cloud growth accelerated, and the increased CapEx outlook further signals that we are still in the early stages of the AI.