Asymco Bulletin 013 - May 17, 2026
by Horace Dediu
Asymco Bulletin is a digest of all the work we have published for the week ending May 17, 2026.
Research
June Quarter Expectations
22% EPS growth is implied based on guidance. To review, "We expect our June quarter total company revenue to grow by 14%-17% year-over-year, which comprehends our best view of constrained supply. On iPad, keep in mind, we face a difficult compare driven by the launch of the A16-powered iPad in the prior year. We expect services revenue to grow at a year-over-year rate similar to what we reported in the March quarter after removing the favorable year-over-year impact from foreign exchange tailwinds. Keep in mind, during the March quarter, FX was a 2.5 percentage point tailwind to the total company growth rate, and for services, →
Is a Crash Coming?
A Series on Valuation in the age of AI Apple recently hit an all-time high. Today the stock is trading at a P/E of 35. The P/E ratio is the current share price P divided by the last four quarters’ net earnings per share E. But we also have a pretty good idea of the earnings for the next quarter, ending June (now almost half-way completed). The guidance very clearly suggests that on a one Quarter forward basis the P/E ratio is 34. I’ve maintained for at least 15 years that a reasonable multiple for Apple is 35.
Stay tuned for upcoming Asymco One original research:
- Why the most common metrics for valuation are insufficient — the problem with the P/E ratio
- What are the alternatives that into consideration exceptional cash and capital expenditures — The EV/FCF ratio
- How does the P/E ratio differ from EV/FCF and what does it mean if they diverge one way or another
- How do the Mag 7 et. al. appear on these Metrics
- How to complement snapshots like valuation ratios with the time series of fundamentals
- Why payback measures are the ultimate measure of valuation
- What are the current payback measures for the Mag 7 et.al.
- Compare Apple to its peer group
- Finally assess whether a collapse in confidence is imminent
Nota Bene
The Smartphone Market is Cracking → Apple takes 45% of revenue and nearly all the operating profit. Samsung makes more on memory than on phones, and Google is preoccupied with cloud and AI. The situation is hopeless for anybody but Apple, and market may break altogether next year. →
What’s wrong with Chromebooks? Market down 11% in Q1, outlook even worse for the year as Neo steps in. → Omdia projects sharp declines across the next three quarters. The MacBook Neo alone may ship 11 million units this year, against roughly 10 million Chromebooks. When the only buyers are a handful of government agencies, things turn scary bad very quickly. →
iPhone Share of US Big 3 Carriers reaches 75%, 77% with Verizon → At the low end, rising memory costs are consolidating prepaid around Motorola and Samsung. Smaller players are exiting. At the top, Apple held iPhone 17e pricing flat and doubled entry storage to 256GB; for manufacturers with thin hardware margins, this will be tough, perhaps impossible. A bifurcated market is emerging. →
Office Hour Q&As
The great memory panic of 2026 → Apple negotiates the base load on two-year lead times. The spike is at the margin, on variable spot supply. That is where the smaller suppliers live. Every semiconductor boom is followed by a bust. →
Will Apple Silicon Tackle Memory? → These commitments take years. Memory may come next, the way Qualcomm did. TSMC is the question after that. Capability is not willingness. →
What Are the Mobility Design Surfaces? → Public transport is shared. Micromobility is a heads-up experience. Cars are a lousy business, and the other modes offer almost no design surface. The opportunity is spatial computing outside interior spaces, where the entire world becomes the surface. →
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