$Apple(AAPL)$ Expectations for AAPL were for AI features to be able to drive ~10%+ y/y growth in iPhone sales. If accurate, very early indications are that sales are down ~10%. As stated in Amara’s Law: "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run." With Apple’s CY24 PE having expanded to 31x versus the S&P at 24x on AI expectations, it is hard to argue for valuation support at current levels. A crucial trait for successful investing is admitting when you are wrong and moving on. I think I am wrong in the short run but have a feeling that I will be back. In the long run, I believe consumers will want AI functionality available to them 24/7 and the smartphone is the one piece of technology that we have with us all the time. The staggered rollout of the AI feature across geographies, especially in China which will get it in 2025, may be part of the reason that very early indications of demand are less than expected as well. Also, promotion of the new phones by the US wireless carriers is not much different than last year.
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