Is it going to be a happy year for
Apple? It feels like it's going to get off to a
rough start. I think it's time to get the popcorn
because in my opinion, this is the next stage of, I think, the growth phase in
Cupertino. And I think it will give you a good.
How do you factor in this kind of stuff? I can't buy a watch.
I need a new watch and I can't buy it right now.
We're talking less than 1% of disruption from Apple Watch here.
In terms in the actual quarter. I think it just speaks to they're going
to have patent issues like this on health care.
But there's a renaissance of growth on iPhone units, services, double digits.
And that's why I think a lot of the Bears right now, they're deep in those
caves in hibernation mode. I think a year from now we have a $4
trillion market cap on Apple. You say the BRZ had a great fictional
story of a Netflix fictional fictional story.
We all want to be in that Apple. I got.
I got to hand it to you. This shirt just screams, you know, full
for the coffers, full of vigor. But you look at the China story so may
make sense of this for us. How do you get to $4 trillion when you
still got the government pushing back against Apple products?
It was a headline just in December. I mean, is that missed or is that a
headwind? I think it's a headwind.
And also, in my view, in terms of China is that I'm not saying it's Risen
Champion in Beijing with Apple, but we are seeing growth and that's something
we've seen come out of Asia checks even over the last week because you have 100
million iPhones in China and a window of an upgrade opportunity, as does upgrade
and look for Huawei. It's a good phone, but realistically,
it's an iPhone 12, I'm saying, from an actual functionality perspective.
So I do think that it's a headwind they have to contend with, but it is the
hearts and lungs of the Apple story. And that's why a lot of the bears at 500
billion, a trillion, trillion, they have to know it's all about the giant
trillion. Now it's all in 3 trillion.
I think going to for China, it's always about that big, bad Wolf.
The China story in the actuality, China has actually been fueling the engine.
Well, let's talk about what the bears are saying right now, because they're
saying you think about in terms of the product lineup, that Apple really hasn't
had a hit since the AirPods and that was all the way back in 2016.
So you talk about this new growth, but from the product line of where is that
going to come from? Well, first of the install base, it's
unparallel. It's the best install base in the world.
So just from an installed base perspective, you have 250 million
iPhones in a window of an upgrade opportunity.
I think that's what iPhone 15 so far. Christmas came early, a strong holiday
season, but for 2024 and Gurman talked about this.
Well, I believe you're going to have not just new phones that come out from an
iPhone 16, but we believe you're going to have the app or the iPhone App Store,
which you can be an A.I. App store focused on AI apps.
That's going to be something that's going to be incremental for services.
And I think that's very important. You combine it with Vision Pro and we
believe more and more products coming out, they flex the muscles.
Dan, is there a bearish story, though, on Apple?
I mean, I think if Tom Keene was here and I know this is how we feel, we are
an Apple family and when somebody goes to buy something like this or you can't
do that, it's going to be an Apple product because that's been our
infrastructure, that's our network. No green text bubbles there.
Yeah, well, there's an app that I think what people but I just that installed
base I'm looking at what 2024 revenue estimate of $397 billion.
Sure. Every time the Apple numbers cross
they're off the charts. Even if the growth isn't significant,
there's still that install base is enough to keep a lot of momentum.
Kind of keen was here what would he be focused on and and it kind of is we know
Kane's here just like I'm an incarnation of Tom Keene.
You are. I am.
I am king here. It's in a I, it's a I generated.
That is their terror story. But look, realistically, it's about
value. Look, if you look at valuation, you look
at the cash flow generation of Apple there we're going to see over the coming
years the EBA that margins are expanding.
Now in the bear story, it's look old the bears they just look at their
spreadsheets on park have in their you know in their tower saying this is an
expense you don't have a bear story for Apple at all because to me the bear
story it's valuation it's China. And I think at that point it's it's a
headwind, but it's more a fictional Netflix story than reality that's going
to hurt them. And then it's just more competition.
But it also it comes down to valuation. And that's why this year I think the
Bears, they focused so much on valuation instead of the actual underlying growth
story that's happening, not just rapid, but we believe it's the star of a new
tech bull market for tech. I mean, and this is this is your thesis
for next year, which is about I mean, 2023 was a year in which every time you
saw an A.I. story evolve Microsoft, we were talking
about AI this year just out of that.
Hey, I know some of you didn't have a. Yeah, I know.
Yeah. So I get tempted by is that big rather
than the treadmill. But on a slightly more serious note.
And I have been the dominant force as well as balance sheets intact.
I put those three together and let's let's just put Apple aside for a moment.
Clyde and a I hideaway disaggregate. Who's going to perform well in this?
What's going to make a cloud, a grade and an air grade stock?
Yeah. And I think you hit on what's really a
key point. If you look at what's happened when the
Dell in Redmond on top of that mountain from a cloud perspective.
Now, this is more modernization for the hyperscale players from Microsoft, for
Amazon, for Google. We believe for every $100 of cloud spend
the last four or five years, there's 35 to 40 incremental.
Hey, I spent. That's why I'd say when you can
Microsoft, you could Google. This is going to be just a new frontier
of growth. And then of course, you have the
godfather of A.I., Jensen and Nvidia. This is really just starting what we've
used in 1995 moment. It's Godfather of AI, it's New York
Giants Stock in the S&P 500 is the biggest tech transformation in 30 years
haven't seen since 1995. Star of the Internet.
And we believe this is actually the beginning of the next phase of this.
But most want to know are there a million ETFs that have Olsen come on
that market? So there were there was a few dozen that
were launched way before we started talking about AI around this time last
year. But I do want to switch gears here and
talk about EVE demand, because this has been one of the stories that's really
emerged that it just feels like all of these automakers really miscalculated
how much demand there would be for EVs. And now you're seeing those production
targets get cut. How does that factor into how you're
thinking about Tesla? Is that a bear case for Tesla or does
Tesla just command more of maybe a shrinking pie?
Yeah, I think that's a great point. Right now it's Tesla's world, everyone
else paying rent when it comes to electric vehicles.
And I think they're doubling down. You look what's happened.
Detroit, GM, Ford actually pulling back a little from March vehicle, some of the
foreign automakers. Look, demand's definitely soft and price
wars have come through, but a lot of those storms have now passed.
I think for for Tesla specifically, unit volume looks strong in China.
I think there's going to be a record quarter for China.
You know, in terms of Q4, you go into next year, I think demand actually
starts to accelerate a bit relative to where people thought.
I think for the overall industry, it's still a massive transformation, but now
you're starting to maybe peel back a bit in terms of, okay, this is not going to
40% penetration, maybe it's 2530. Dan, 30 seconds.
China is the rallying cry of the bears when it comes to Apple.
So, too, when it comes to Tesla, you think about all those Chinese EV makers.
How does Tesla compete overseas? They've done I mean, I think a lot of
the price war it was this was a poker move for the ages by Musk cut prices
focus on units and that's why right now this has been flex the muscles in
Beijing for not just Tesla but of course for Apple despite their noise.
You know, before we started, we showed a piece on drones.
Just real quickly, 25 seconds. Is there a drone plane for drone play
for you? I mean, all of the company Amazon's in
at Wal-Marts, everybody's in it. And there's individual startups.
Yeah. Look, I think that's passe.
I remember being six years ago. But yeah, I think that's
that's what you have to separate is like, Yes, yes.
But you separate hype from the RIA. There's, there's parts of market that
are growth. Yeah.
But you look at I this is the Super Bowl in terms of tech market we can have a
bull tech market in 2025 to I think this bull tech market goes we've for another
two years. That's why right now it's getting the
popcorn out.
