[Music] There's the closing bell on Wall Street and now it's market domination overtime. Jerobic is going to be along in a moment to give us the details from today's session, but I'm going to start with the major averages here and it looks like things are taking a little bit of a leg lower as we uh close out today's session, this Monday session. The Dow now down about a point. Little changed on the day here after starting the day in the red. It's kind of made a round trip here. Uh not necessarily any specif ...

Apple's World Wide Developers Conference (WWDC) kicks off today. (Photo Illustration by Avishek ... More Das/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty ImagesKey Takeaways Stocks rallied again; volatility hovers near key historical average Earnings strong but second quarter guidance signals possible slowdown Trade talks and inflation data may influence market direction soonIndices posted a second consecutive week of gains as stocks continued their recovery from the April lows ...

>> GOOD MORNING. I AM TOM MACKENZIE IN LONDON. THESE ARE THE STORIES THAT SITE YOUR AGENDA.CALLING FOR NATIONAL GUARD TROOPS TO BE RETURNED TO HIS CONTROL AS LOS ANGELES IS ROCKED BY A THIRD DAY OF PROTESTS. STOCKS GAIN IN ASIA HEAD OF TRADE TALKS BETWEEN THE U.S. AND CHINA. TARIFFS, TECH RESTRICTIONS AND ACCESS TO RARE EARTH MINERALS.IN LONDON TECH WEEK KICKS OFF AS THE GOVERNMENT LOOKS TO PUT AI AT THE HEART OF ITS GROWTH AGENDA. GOOD MORNING AND HAPPY MONDAY. LET'S CHECK IN ON THESE MARKETS.A POSITIVE DA ...

Core Insights - Apple is struggling to upgrade its AI voice assistant, Siri, facing significant challenges in integrating advanced large language models (LLMs) [2][3][4] - The company is expected to showcase its AI progress at its annual event, but investor sentiment is pessimistic regarding any major announcements [2][5] - Recent reports indicate a 20% drop in Apple's stock price, marking its worst performance in 15 years, largely attributed to its lag in AI compared to competitors like Microsoft and Google [5] Group 1: AI Development Challenges - Apple is attempting to develop its own LLMs to enhance Siri, which is used in hundreds of millions of devices, but has encountered bugs during integration [3][4] - Former executives have criticized the gradual development approach, suggesting that a complete overhaul of Siri is necessary for meaningful improvement [4] - The updates to Siri are a key part of Apple Intelligence, a suite of AI features aimed at boosting hardware sales [4] Group 2: Market Performance and Investor Sentiment - The recent stock price drop of 20% reflects investor concerns about Apple's competitive position in AI [5] - Experts predict that the upcoming Worldwide Developer Conference (WWDC) will highlight Apple's shortcomings in AI compared to its rivals [5] - Craig Moffett from MoffettNathanson notes that Apple will be more cautious in its presentations, avoiding overpromising on unready features [6] Group 3: Broader Business Concerns - In addition to AI challenges, Apple faces tariffs that could impact its hardware profit margins [6] - The services division, which has a gross profit margin of 74%, is under legal scrutiny regarding App Store fees and payments from Google for being its default search engine [7]

Core Viewpoint - Apple shares have declined 18% in 2025, making it one of the worst performers among the "Magnificent Seven" due to tariff uncertainties and slow AI progress [1][2] Financial Performance - The stock is currently 21% below its peak, indicating a need for recovery [2] - Apple reported a net income of $24.8 billion in Q2 2025, showcasing its profitability [6] - The price-to-earnings ratio stands at 32, which is considered high given the expected earnings per share growth of only 8.8% from fiscal 2024 to fiscal 2027 [13] Brand and Market Position - Apple's brand is one of the most recognizable globally, built over years of exceptional product and service offerings [5] - The strong brand has contributed to Apple's pricing power and financial strength [6] - The combination of products and services creates a powerful ecosystem, resulting in high customer retention and competitive advantages [7] Growth Challenges - Apple's growth appears to be slowing, with net sales increasing less than 7% from fiscal 2021 to fiscal 2024, and just over 4% in the first half of fiscal 2025 [10] - The maturity of the iPhone, nearing two decades in the market, limits further market penetration opportunities [10] Competitive Landscape - Apple is perceived to be lagging in the AI sector, with significant delays in updates such as Siri, while competitors are advancing rapidly [11] - The ongoing tariff situation, particularly with China, poses challenges for Apple's supply chain and forecasting [12]

Economic Indicators - The May headline Consumer Price Index (CPI) is expected to rise by 0.2% month-over-month, with the annual rate increasing to 2.5%. The core CPI is forecasted to rise by 0.3%, leading to an annual rate of 2.9% [3] - Wells Fargo economists suggest that the May CPI report will indicate whether April's signs of tariffs were early indicators of inflation or typical monthly fluctuations. They anticipate inflation to increase in the second half of the year due to higher tariff rates [3] - T.S. Lombard notes that the Federal Reserve is facing a conflict as employment and inflation are moving in opposite directions, complicating policy decisions [4] Apple Inc. - Apple is set to host its annual Worldwide Developers Conference, with expectations for a focus on design improvements and AI integration rather than major announcements [5][6] - Analysts predict that the next version of iOS will include features like public Wi-Fi access syncing and AI-powered battery optimization, but the overall event is expected to be low-key with minor updates [7] GameStop Corp. - GameStop is expected to report an earnings per share (EPS) of $0.04, a significant improvement from a $0.12 loss in the same quarter last year, attributed to aggressive cost-cutting rather than revenue growth [8] - The company has purchased 4,710 bitcoins, valued at approximately $513 million, which constitutes about 10% of its $4.7 billion cash reserve [8] - Analysts express caution regarding GameStop's strategic direction, noting declining sales and ongoing store closures, while maintaining a Hold rating [9] Meta Platforms Inc. - Meta is in advanced discussions to invest over $10 billion into artificial intelligence startup Scale AI, which could rank among the largest private funding rounds in history [10][11] - Scale AI, valued at approximately $14 billion in its most recent funding round, provides data-labeling services essential for training machine learning systems [11][12] Microsoft Corp. - Microsoft plans to introduce a ranking system for AI models based on safety performance, which will be available to its cloud customers [12][13]

Core Insights - Warren Buffett will step down as CEO of Berkshire Hathaway at the end of this year, marking the end of an era for the investment conglomerate he has led since 1965 [1] - Berkshire Hathaway has increased its exposure to technology trends and growth stocks, particularly in the realm of artificial intelligence (AI) [2] Group 1: Berkshire Hathaway's Investment Strategy - Berkshire Hathaway has been reducing its stock holdings and increasing its cash position, reflecting concerns about market valuations relative to macroeconomic and geopolitical risks [5] - The company has significantly reduced its holdings in Apple, which may indicate specific concerns regarding the business despite Apple remaining the largest stock holding in Berkshire's portfolio [9] Group 2: Apple Inc. - Apple has a market capitalization of $3 trillion and constitutes 21.6% of Berkshire's total stock portfolio, making it the largest publicly traded company in the portfolio [4] - Apple faces challenges in the AI space, particularly with its Siri platform, which has not met performance expectations [6] - The company is also experiencing difficulties in the Chinese market, with delays in the rollout of its AI platform and soft sales for the iPhone 16 [7][8] Group 3: Amazon.com Inc. - Amazon represents a smaller percentage of Berkshire Hathaway's portfolio, with its investment being made by one of the portfolio's managers rather than Buffett himself [10] - Amazon Web Services (AWS) is a key growth driver for the company, holding a 30% market share in cloud services and expected to be a multi-hundred-billion dollar revenue business [11][12] - AWS sales increased by 17% year over year in the first quarter, contributing significantly to Amazon's operating income [13]

Core Insights - Apple is under pressure to demonstrate its advancements in artificial intelligence (AI) and its ecosystem of devices and software at the upcoming Worldwide Developers Conference (WWDC) [3][4] - The company has faced criticism for not delivering promised AI features, particularly an upgrade to its Siri voice assistant, which has been delayed [5][6] - Industry analysts suggest that Apple needs to regain credibility and may need to address its AI shortcomings during the event [5][6] AI and Product Development - Apple is expected to showcase its plans for AI integration and improvements to its devices at WWDC, following previous announcements of a suite of AI features called "Apple Intelligence" [4][6] - There are rumors that Apple may form new partnerships with companies like Google or Perplexity to enhance its AI capabilities [6] - The company is perceived to have underestimated the shift towards AI and is now racing to catch up with competitors [6] Developer Relations - There is ongoing tension between Apple and developers, particularly regarding the 30% commission Apple takes from app sales and its restrictive policies [8][9] - Analysts indicate that Apple needs to offer more support and flexibility to developers, especially as it incorporates AI into its software [9][10] - The relationship with developers is critical for Apple's success, and the company may need to rethink its closed ecosystem approach in light of AI advancements [10] Competitive Landscape - The involvement of Jony Ive, the designer behind the iPhone, with OpenAI to create a competing device adds pressure on Apple to innovate [11] - Analysts speculate that Apple may unveil new hardware at WWDC to demonstrate its commitment to innovation despite recent setbacks [11] - The loyalty of Apple customers is noted as a potential buffer against the company's current challenges, as many users remain committed to the brand [13]

Core Viewpoint - Apple is facing significant challenges ahead of its Worldwide Developers Conference (WWDC), including tariffs, delays in its AI initiatives, and concerns about its long-term hardware vision [1][3][5]. Group 1: WWDC Event Overview - The WWDC is set to take place in Cupertino, California, where CEO Tim Cook will deliver the keynote, traditionally featuring product reveals and updates [2]. - Analysts expect the announcements at this year's WWDC to be relatively incremental, with a potential visual design overhaul being the most notable change [3]. Group 2: Challenges Facing Apple - Apple is grappling with the impact of tariffs, particularly a projected $900 million in tariff costs for the June quarter, which could have severe consequences for the company [6][7]. - The company is also dealing with legal challenges, including a ruling that prevents it from collecting a 27% fee from US developers directing users to external purchases, which could affect its relationship with developers [8]. Group 3: AI Initiatives and Competition - Apple introduced Apple Intelligence in 2024, but it has not met expectations for driving iPhone upgrades, and the rollout of a more personalized Siri has been delayed [4][5]. - The recent hiring of Apple's former design lead by OpenAI raises concerns about Apple's competitive position in AI innovation [10][11]. - Analysts emphasize the importance of WWDC for Apple to clarify its AI roadmap and address delays in its AI capabilities [5][12].

Core Viewpoint - The article discusses the potential for value stocks in the AI sector, highlighting companies that may attract value-oriented investors like Warren Buffett, despite their growth characteristics. Group 1: Alphabet - Alphabet is positioned as a potential fit for Berkshire Hathaway due to its leadership in AI and strong cash flow from digital advertising [4] - The company generates 74% of its revenue from ads, facing pressure as its search market share drops below 90%, prompting diversification into Google Cloud and autonomous driving with Waymo [5][6] - Alphabet plans to invest $75 billion in capital expenditures this year, supported by $95 billion in liquidity and $75 billion in free cash flow over the past 12 months, making it attractive for value investors with a P/E ratio of about 19 [6] Group 2: Meta Platforms - Meta Platforms, known primarily as a social media company, is investing heavily in AI and the metaverse, with a capex commitment of $64 billion to $72 billion by 2025 [7][8] - The company has over $70 billion in liquidity and generated $50 billion in the last 12 months, allowing it to support its ambitious investments [8] - With a P/E ratio around 27, Meta presents a reasonable valuation alongside its potential for AI leadership, appealing to value-oriented investors [9] Group 3: Qualcomm - Qualcomm is identified as a surprising value stock, with diversification into IoT, automotive, and data center processors amid challenges in the smartphone market [10] - The company has spent $1.1 billion in capex over the past year, but the emergence of low-cost AI could revitalize its smartphone segment, which has a 12% annual revenue growth rate [11] - Qualcomm's IoT and automotive segments have shown impressive growth rates of 27% and 59% respectively, and it trades at a P/E ratio of 15, making it an attractive investment opportunity [12]