With Apple Inc. (NASDAQ:AAPL) having recently launched the latest iPhones, Cramer personally visited the firm’s store in New York to gauge consumer sentiment. After snapping some photographs and posting them on social media, the CNBC TV host then discussed his visit in his morning appearance on September 18th:
“Yeah look, it was a big crowd. It was not a crowd where people were tenting. There were no tents, I’ve seen that happen. But people were excited. Remember, this is not the Duo. You’re not going for the Duo. . this was the. . .18 Pro. I’ve seen it at 6:45, it’s very crowded and you’re trying to push people aside. But this wasn’t a very big crowd. What people are going for, this is the Pro Max, this is not the Duo. And it’s got up to 45 hours of battery life and great aperture. And they have some tremendous pictures there.
“Ternus is, he’s giddy, he’s giddy, I think that’s the right word after speaking with him. He’s very excited and just feels like this is his time. He knows that the Duo is going to be unbelievable. I said to him that I’m going to get this phone and I’m going to get the Duo. And I’m going to have two phone numbers. And he said you know, people are doing that.”
For Apple Inc., the latest iPhones sit at the heart of the firm’s narrative. Unlike other big tech firms, the consumer electronics giant has refrained from pouring billions of dollars into AI capital expenditure. Cramer has dubbed this strategy as Apple Inc. being a ‘free loader’ that gets to pick the best AI model and offer it to its sizable user base.
The user base is also where the iPhone ties into the narrative. With Apple Inc. having reported a massive active device base of 2.5 billion as part of its first quarter release, the narrative is driven by its ability to continue to retain and grow its users by providing new hardware products and software services. The iPhone’s importance is evidenced by the fact that during Apple Inc.’s fiscal Q3, the product generated $54 billion in revenue which was almost half of the overall revenue of $109 billion.
On this front, iPhone revenue grew by 21.7% in Apple Inc.’s latest quarter to indicate healthy user trends. Additionally, the firm is also progressing towards growing the sales of other products. In Q3, Apple Inc.’s Mac revenue surged by 28.7% annually to outpace the broader revenue growth of 16.4% and the iPhone growth as well. With the launch of the iPhone 18 lineup, the role that AI and Artificial Intelligence can play for even more growth has got the bulls all excited.
Yet, despite its scale, Apple Inc. isn’t immune to broader industry trends. One such shock came in the form of high memory prices that forced the firm to hike prices across multiple device categories earlier this year. Then, Apple Inc.’s Q4 revenue guide modeled growth to range between 9% to 11%, which missed some analyst estimates. These constraints could create margin pressures for the firm.
Looking at hedge fund sentiment, Insider Monkey’s data shows that 169 funds had disclosed a stake in Apple Inc. in Q2, which was essentially similar to 170 funds in Q1. The forward P/E ratio of 35.09 is still higher than AI-spenders Google’s 23 and Microsoft’s 24.94. Short interest as a percentage of float is negligible.
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