2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders as of Q3: 158
LMCG’s Equity Stake: $71.46 Million
Apple Inc. (NASDAQ:AAPL), based in Cupertino, California, is a global technology leader recognized for its consumer electronics, software, and services. Originally founded in 1976 as Apple Computer Company by Steve Jobs, Steve Wozniak, and Ronald Wayne, the company rebranded to Apple Inc. in 2007 to reflect its expansion beyond computers.
Apple’s product ecosystem includes hardware such as the iPhone, iPad, Apple Watch, Mac, and Apple TV, alongside operating systems like iOS, iPadOS, and macOS. Its software and services portfolio features Apple Pay, iCloud, Apple Music, and Apple TV+. As one of the Big Five U.S. tech giants, Apple has consistently led in market capitalization since 2011. Apple Inc. (NASDAQ:AAPL) is the largest mobile phone and tablet vendor globally, the fourth-largest personal computer manufacturer, and a dominant force in the industry.
As of Q4 2024, the company reportedly faced challenges in China, where iPhone sales declined by 11.1%, bringing revenue in the region down to $18.51 billion – its largest drop since Q1 2024. Apple continues to struggle in the world’s largest smartphone market due to intensified competition from domestic brands like Oppo, Vivo, and Huawei. CEO Tim Cook attributed part of the sales decline to the unavailability of Apple Intelligence, the company’s generative AI feature, in China and other key markets.
Despite these challenges, Apple Inc. (NASDAQ:AAPL) posted revenues of $124.3 billion for the quarter ended December 2024, which was 3.95% up from the revenue of $119.58 billion in the same quarter of the previous year. The revenue crossed the consensus estimates of $124.03 billion for the quarter by a slight 0.22%. Apple reported quarterly earnings of $2.40 per share in Q4, $0.22 more than the EPS for the quarter a year ago. On January 30, 2025, the company announced that its board of directors had declared a quarterly cash dividend of $0.25 per share for the company’s common stock payable on February 13, 2025, to holders of record at the close of business on February 10, 2025.
Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
