Apple Keeps Finding New CustomersCONCLUDED[Apple Earnings Beat Estimates. iPhone Has 'Best-Ever Quarter.']Last Updated:---18 hours ago# Apple Keeps Finding New CustomersBy[Adam Levine]Even though they are mature products, Apple continues to attract new customers to its Macs, iPads, and Watches, with more and more people apparently valuing the ecosystem's integration. About half of the customers for the three products were buying their first one. ...

Group 1 - Intel Corporation is recognized as a trending AI stock, with KeyBanc upgrading its rating from Sector Weight to Overweight and setting a price target of $60.00, driven by improving foundry yields and strong data center demand from hyperscalers [1] - Despite challenges in the server CPU market, Intel is reportedly sold out for the year in server CPUs as hyperscalers increase data center construction [2] - The company is contemplating a 10-15% increase in average selling prices, with foundry yields for the 18A process improving to over 60%, facilitating the ramp-up of Panther Lake [3] Group 2 - Intel's yield performance is favorable compared to Samsung's SF2 process, although it lags behind TSMC's 2nm process, which operates at 70-80% yield [4] - Intel has secured Apple as a customer for its 18A process, which will be utilized for low-end M-series processors in MacBooks and iPads, expected to enter production in 2027 [5] - Discussions are ongoing between Intel and Apple regarding the use of the 14A process for low-end mobile A-series processors for iPhones, anticipated for 2029 [5]

Core Viewpoint - Intel's shares have experienced a significant uptrend, and a KeyBanc analyst believes further growth is possible due to advancements in the foundry business, projecting a price target of $60, indicating a potential upside of 30% [1][2]. Group 1: Analyst Insights - John Vinh from KeyBanc raised Intel's rating to "Overweight," suggesting that the stock has not fully priced in its positive developments despite a 150% gain since last August [2]. - The partnership with Apple as an 18A-P customer is seen as a major milestone for Intel, with potential future applications in low-end iPhone chips [3]. Group 2: Product Developments - Intel recently launched its first chips built on the 18A process, claiming performance improvements of 60% in multithreaded workloads and 77% in gaming compared to previous models [4]. - The stock has shown a bullish trend, breaking above its 20-day moving average, indicating strong market control [4]. Group 3: Market Demand and Strategic Importance - The demand for Intel's CPUs is being driven by the artificial intelligence (AI) sector, with the company reportedly "almost sold out for the year" [5]. - Significant investments from major firms like SoftBank and Nvidia, along with endorsements from political figures, highlight Intel's strategic importance in the tech landscape [5][6].

Core Viewpoint - The article suggests that despite skepticism surrounding AI investments, Apple remains a strong stock option due to its business model and performance, which are less dependent on AI compared to other tech companies [1][5]. Group 1: AI Market Context - The AI boom has significantly influenced stock market gains, with AI-related stocks contributing to 75% of S&P 500 returns since the launch of ChatGPT in November 2022 [2]. - Major tech companies are investing heavily in AI infrastructure, with hundreds of billions of dollars allocated to high-powered chips and data centers [2]. - Recent skepticism has emerged regarding the profitability of AI investments, highlighted by an MIT study indicating that 95% of generative AI projects failed to deliver measurable ROI [3][4]. Group 2: Apple's Position - Apple is not categorized as an "AI company" like Oracle or Nvidia, as it spends less on AI and does not rely on AI's future potential for its business model [6][7]. - The company has avoided the costly AI arms race, focusing instead on its core business of selling devices [8]. - Apple's stock has increased by approximately 33% over the past six months, outperforming the S&P 500 and major AI stocks [9]. Group 3: Financial Performance - In fiscal year 2025, Apple achieved record revenue of $416 billion, with a fourth-quarter revenue of $102.5 billion, marking an 8% year-over-year increase [11]. - iPhone revenue rose by 6% year-over-year, setting a new record for the September-ended quarter [11]. - Services revenue grew by 15% year-over-year, with a gross margin of about 75%, indicating a shift towards higher-margin digital services [12][13]. Group 4: Future Outlook - Apple anticipates 10%-12% revenue growth in Q1 2026, driven by double-digit growth in iPhone sales during the holiday season [14]. - Analysts have raised EPS estimates for Apple to $2.67 for the current quarter, reflecting positive investor sentiment [14]. - Despite a price-to-earnings ratio of 34, Apple may appear more attractive compared to high-priced AI stocks if AI investments do not yield quick returns [15]. - Apple is well-positioned for sustained profitability, regardless of the potential AI bubble [16].

Core Viewpoint - Apple is reportedly exploring a partnership with Intel for chip manufacturing, driven by the need for supply chain security amid geopolitical tensions and increasing chip requirements [1][2]. Group 1: Apple and Intel Partnership - Apple is currently dependent on TSMC for its processors and is seeking a second-source manufacturer to enhance supply chain security [1]. - Intel's expansion in the U.S. and its new status as a National Treasure make it a viable candidate to meet Apple's chip demands [1]. - The potential collaboration could involve Intel's advanced 18A process technology for future M-series chips, targeting high-volume devices like iPads and MacBook Airs with a production timeline aimed at 2027 [2]. Group 2: Market Reaction and Stock Performance - Intel's stock price surged to $40.67, reaching a new 52-week high and increasing its market capitalization to approximately $194 billion, driven by rumors of the Apple partnership [4]. - The stock's rise indicates significant institutional participation, suggesting a shift in investor sentiment towards Intel's manufacturing capabilities [4][5]. - The rapid increase in stock prices has created a disconnect with outdated analyst models, likely leading to upward revisions in price targets [6][8]. Group 3: Valuation Metrics and Investment Narrative - Despite a year-to-date rally of approximately 103%, Intel's price-to-book ratio stands at roughly 1.53, indicating it is not yet overvalued [13]. - Intel's book value per share is around $26.67, suggesting that the market is paying a slight premium over its liquidation value, primarily for tangible assets [14]. - The valuation gap between Intel and its competitors like TSMC, AMD, and NVIDIA indicates that Intel is still perceived as a distressed asset rather than a growth company [15]. Group 4: Future Outlook - The investment narrative for Intel has shifted from skepticism to momentum, driven by strategic validation from potential partners, market conviction, and fundamental safety in valuation [17]. - The heavy trading volume during a typically quiet holiday period reflects strong interest from large investors in Intel's stock [18]. - The current market conditions may present a compelling entry point for long-term investors, as Intel is increasingly viewed as a critical infrastructure player for the future of computing [18].

Summary of Key Points from the Conference Call Company and Industry Overview - **Company**: Apple Inc. - **Industry**: Technology, specifically focusing on consumer electronics and smartphones Core Insights and Arguments 1. **Financial Performance**: Apple reported a strong September quarter with revenue and net profit up 8% and 86% year-over-year respectively, and guidance for December quarter revenue growth of 10-12% year-over-year [1][2][3] 2. **Product Performance**: - iPhone sales growth of 6% year-over-year driven by strong demand for iPhone 16 and iPhone 17, with expectations for double-digit growth in December quarter [2][3] - Greater China revenue declined 4% year-over-year in September quarter, but is expected to return to growth in December quarter due to favorable subsidies [2][3] - Supply constraints were attributed to allocation issues rather than manufacturing capacity [2] 3. **Tariff Impact**: Apple estimated tariff costs of US$1.1 billion in September quarter and US$1.4 billion in December quarter, with tariffs decreasing from 20% to 10% in China [2][3] 4. **Investment in the US**: Apple announced a US$600 billion investment over the next four years focusing on advanced manufacturing, silicon engineering, and artificial intelligence [2] 5. **iPhone Build Plan**: - Upward revisions in iPhone 17 production due to strong demand, with total builds for 2H25 reaching 95 million units [1][5] - Changes in product mix affecting EMS share allocation, with Luxshare expected to benefit the most [5] Additional Important Insights 1. **Market Trends**: The China smartphone market's decline narrowed to 0.6% in CY3Q25, with iPhone shipments growing 0.6% year-over-year [3] 2. **Sales Dynamics**: iPhone sell-out shipments in China showed a 24% year-over-year growth since the launch of the iPhone 17 family, supporting the positive outlook for sales in CY4Q25 [3] 3. **Supply Chain Observations**: Certain supply-chain participants reported delayed delivery impacts, which may support better-than-seasonal performance in the fourth quarter [5] Companies Mentioned - **Apple Inc.** (AAPL.O) - **BYD Electronic** (0285.HK) - **Dongshan Precision** (002384.SZ) - **Foxconn Industrial Internet** (601138.SS) - **Lens Technology** (6613.HK) - **Luxshare Precision Industry** (002475.SZ) - **Pegatron** (4938.TW) [7]

Core Viewpoint - The market has been underestimating Apple, which remains a powerful tech stock despite recent challenges and competition from Nvidia and Microsoft [1] iPhone Sales Impact - iPhone sales are crucial for Apple, accounting for about 50% of total sales, and are a key indicator of the company's performance [4] - Recent fiscal third-quarter results showed a 13% year-over-year increase in iPhone sales, indicating positive momentum [5] - Sales of the iPhone 17 have outpaced those of the iPhone 16 by 14% in the first 10 days of its release in the U.S. and China, highlighting strong demand in key markets [6] Consumer Loyalty and Ecosystem - iPhone users exhibit strong loyalty to Apple, often purchasing a range of interconnected products, which enhances customer retention [8] - The Apple ecosystem provides a competitive edge over other hardware companies, with a growing reliance on high-margin subscription services for sales growth [9] Market Position and Valuation - Apple is currently the third-most-valuable company globally, with a market cap of $3,989 billion and a current stock price of $268.97 [10] - Despite concerns about Apple's progress in artificial intelligence, strong iPhone sales suggest consumer satisfaction with Apple's offerings [11] - While Apple may not be a high-growth stock, it is expected to provide reliable gains and value, trading at 29 times forward one-year earnings, indicating reasonable valuation [12]

Group 1: Apple Supply Chain Diversification - Apple is expanding its manufacturing of new home devices in Vietnam, further diversifying its supply chain away from China [2][9] - The company and its suppliers, including Foxconn, have been increasing investments and production capabilities in Vietnam for various products like iPads and MacBooks [3] Group 2: Bombardier Aircraft Order - Bombardier has issued a bond to finance a $1.7 billion order for 50 new aircraft, following a significant purchase and service agreement [4][9] - The agreement includes options for an additional 70 aircraft, potentially increasing the total order value to over $4 billion, indicating strong demand in the business aviation sector [5] Group 3: Vietnam Airlines Data Breach - Vietnam Airlines confirmed a customer data breach, stating that some customer information was accessed without authorization, but assured that sensitive data remains secure [6][9] - Preliminary assessments suggest that personal data such as names, email addresses, and phone numbers may have been compromised, prompting the airline to advise affected customers to change their passwords [7] Group 4: Australia Economic Indicators - The Australia Westpac Leading Index for September showed a slight improvement to -0.03% month-over-month from -0.04% in August, indicating a minor easing in economic contraction [8][10] - Despite the improvement, the negative reading suggests ongoing challenges for economic activity in Australia, leading to a cautious outlook among analysts [10]

Sales & Discounts - Up to 30% savings on Apple products during Labor Day sales [1] - Discounts available on AirPods, iPads, and other Apple products [1]

Group 1: U.S.-China Trade Agreement Overview - The U.S. and China have reduced import tariffs from over 100% to a manageable level of 10%, with an additional 20% related to drug entry concerns, resulting in a total of 30% for China [5][10] - The agreement is set for 90 days while further negotiations continue [6] Group 2: Impact on Technology Sector - The trade agreement is expected to positively impact technology companies, particularly those that import heavily and thrive in strong economic conditions [2][7] - Apple is identified as a potential major beneficiary due to its significant reliance on Chinese manufacturing, with 90% of iPhones produced in China [8][10] Group 3: Apple Inc. Specifics - Apple’s iPhone accounted for approximately 50% of its total net sales in the most recent quarter, making the previous high tariffs particularly detrimental [8][10] - Following the trade agreement, Apple’s stock rose over 7%, reflecting improved investor sentiment [10] - The new tariff levels alleviate the urgency for Apple to shift its supply chain, which had been a concern for earnings [11][13] - Currently, Apple shares trade at 29 times forward earnings estimates, down from over 35 times, indicating a more attractive investment opportunity [13]