Financial

Some say it's "Cosmic Orange".

To own Apple today, you need to believe its ecosystem can keep deepening even as growth expectations are already high and the stock trades on a premium multiple. The latest quarter’s US$143.76 billion in revenue and US$42.10 billion in net income, powered by iPhone 17 demand and a rebound in China, reinforce that story, while expanding AI features and services aim to make each device more valuable over time. The upcoming low cost MacBook fits neatly into this, extending macOS and Apple Intelligence to more price sensitive users without changing the core near term catalysts, which still sit around iPhone 17 uptake, AI rollouts and services momentum. Key risks feel more about execution and sentiment: memory cost pressures, high expectations baked into the price and any cooling of AI enthusiasm..

Source: Simply Wall St. via Finance.yahoo.

NB: Another money quote: "An interesting angle is how design-led appeal in China, such as the viral “Cosmic Orange” iPhone 17, combined with new AI features across devices is reinforcing Apple’s ecosystem pull for both consumers and developers."

I tried but failed to connect how Cosmic orange is reinforcing Apple's ecosystem pull for consumers and especially developers.

$330 and $325 Price targets, respectively.

Investment bank Goldman Sachs discussed Apple Inc. in January. It reiterated a Buy rating and a $330 share price target on the firm. The bank discussed the firm’s App Store performance in its coverage. It outlined that the App Store spending trends were improving as spending grew by 7% in January to accelerate by one percentage point over December’s 6% growth. Goldman added that the App Store growth should contribute meaningfully to Apple Inc. Services business.

Along with Goldman Sachs, Bernstein also praised the firm. It reiterated an Outperform rating and a $325 share price target. Bernstein cited Apple Inc.’s record iPhone revenue and optimistic growth guidance to point out that the firm was correctly navigating the turmoil in the memory industry.

Source: Insider Monkey.

NB: I remember when both of these banks had negative ratings on Apple.

For reference, some selected current market caps:

• Microsoft (MSFT) - $236.76B
• Apple (AAPL) - $183.40B
• Google (GOOG) - $173.97B
• IBM (IBM) - $159.93B
• Cisco (CSCO) - $138.60B
• Hewlett-Packard (HPQ) - $114.26B
• Intel (INTC) - $109.85B
• Disney (DIS) - $54.31B
• Nokia (NOK) - $48.24B
• Research In Motion (RIMM) - $37.43B
• Amazon (AMZN) - $40.34B
• Dell (DELL) - $29.63B
• Sony (SNE) - $29.10B
• Yahoo! (YHOO) - $24.78B
• Motorola (MOT) - $18.82B
• Adobe (ADBE) - $18.23B
• Palm (PALM) - $2.51B
• RealNetworks (RNWK) - $564.74M

The top 10 world-wide:

1. Exxon Mobil Corporation 352.31B
2. PetroChina Company Limited (ADR) 240.47B
3. Microsoft Corporation 237.58B
4. Petroleo Brasileiro SA (ADR) 220.19B
5. BHP Billiton Limited (ADR) 204.30B
6. HSBC Holdings plc (ADR) 199.98B
7. China Mobile Ltd. (ADR) 199.09B
8. Royal Dutch Shell plc (ADR) 195.76B
9. Wal-Mart Stores, Inc. 195.27B
10. Apple Inc. 183.57B

Steve Ballmer is not worried, Apple is just a rounding error.

Apple’s Q4 2009 conference call revealed that iPod touch sales were up 100% year over year. For the full fiscal year, iPhone grew 78%.

When asked more pointedly, "So when you go from exclusive to multiple, you don't change the charge to the carrier?" Cook answered, "Correct."

Apple has more pricing power than the Don.

Peter Oppenheimer, Apple's Chief Financial Officer, said that the Average Selling Price of iPhones in the quarter "was just over $600. This reflects both high mix of 3GS sellthrough and benefits of rebalancing the ending channel inventory toward the 3GS."

An astonishing admission from Apple who has never revealed their iPhone ASP. Previous analyst estimates had the iPhone ASP at $550. If this is true, then Apple has violated one of the cardinal mobile industry rules: "Thy ASP shall always erode". Given what is known about the components, iPhone gross margin is likely to be above 50%. The gross margin, or what you are able to capture in value above the bill of materials, isthe primary indicator of value creation in the device business. Apple's number is astronomical vis-a-vis the competition. Stay tuned as this gets scrutiny.