I’ve been an Apple investor for many years. I’ve learned to ignore the stock price pullbacks and take comfort in that Apple is run by one of the best management teams in the world. I will never understand those who take a short position in AAPL. Betting against Apple has been a losing proposition. Based on its P/E ratio, AAPL is fairly priced. The detractors think Apple’s growth is largely in the rear view mirror. While Apple is unlikely to ever have a success as large as the iPhone, there is still room for growth.
Based on the rumor mill, there are several areas where Apple will continue to shine.
- If Apple can deliver non-invasive continuous glucose monitoring in the Apple Watch, it will contribute billions of dollars in annual revenue. Blood pressure monitoring is less of a technical challenge and is rumored to appear in the next iteration of the watch.
- Apple will join some of its Magnificent Seven peers and go all-in on LLMs this year. Apple’s use of AI has been profound over the past few years, but subtle. Many of Apple’s customers don’t realize that AI powers features like the camera and Face ID. Predictive text has been the most obvious use of a language model, giving customers a taste of things to come.
- The Vision Pro will remain a niche product while its price is out of reach for most customers. When Apple can produce a headset at the $1000 mark (and make it lightweight), we will start to see mass adoption. I would love to have a virtual 100-foot screen to watch movies, just not at $3500.
- Apple’s moonshot remains an open question. I was disappointed that the car project was killed, despite the fact that margins would never be large enough for Apple to justify the business. There are rumors that Apple is working on a personal robot. I could see this playing out 20 years from now, but can’t imagine what they could come up with in five years at an affordable price.