$AAPL · Meet Kevin · 2026-11-03

My prediction is uh AI labs will enable you to run all frontier models eventually uh on hardware you own stuff you can buy from AMD, Intel, uh Apple, whatever.

Uh, okay. So, I'll take a quick look at the Apple numbers beyond what I've already done. I just want to see what they say about it. Apple and Meta Robotics push anthropic employ 900 billion. Okay, that's fine.

All right, let me see quickly here. So this was total revenue. The iPhone sector advanced 17% iPad and wearables decline. Yeah, but iPad and wearables have regularly been in decline at Apple.

So that that's been highly unsurprising that that's going to happen. Like how like the innovation in the Apple Watch from one to three has been pathetic. Uh like going to two from one was actually like a downgrade because they got rid of the uh blood ox uh measure.

I've actually used that blood ox measure me measure. You're not supposed to, but I've actually used that blood ox device uh flying at like 12,000 ft on a uh non-pressurized Cirrus aircraft.

And we're like, "Oh yeah, let's go check what our blood oxygen's at." And we're looking down and we're like, "Huh, 89, you know, maybe we should descend a little bit." [laughter] We're like, "Yeah, good idea."

So, I think it actually came in clutch for that. Is technically, you know, you could go up to 12 for a certain period of time. We were well within all the legal and compliance windows.

So, we were only at 12 for like 10 minutes and we're like, "Oh, let's just check for giggles." And both of us had the Apple Watch 1 and we're like, "Oh, well, if this is right, we should probably get lower."

So, we immediately hop on. We're like, "Hey, we like to get down to 10." [laughter]

Uh, anyway, service business continued to stagnate, uh, growing slightly less than 10%. Yeah, I mean, okay, that's not ideal. You've got the Apple one product and ideally this is where you'd actually see some better growth.

All right. So, where was the PC section? I wanted to see the PC section. They just didn't show it. That's interesting. The information did kind of a cheesy little summary there.

Okay. So, we'll look at it here. We'll we'll go look at it really quickly. Apple investor relations because I I only briefly looked at it. I didn't save it. We're going to go do that really quick.

Uh let's see here. So, Apple This is the Apple 10Ks. Apple earnings. And what I really care about here is I want to see if there's any push yet on PCs. I don't know because the studio may not have come out this quarter.

We'd have to see what date did new Apple Studios come for sale. Uh September 22nd became available for pre-order. Oh, that's when you could start buying them. Oh, so you only had a week of studio sales before the quarter was over.

Yeah. Okay, that sucks. But that's all right. That gives you opportunities because there this the studio is brilliant. We just have to find segments.

So, let's go to segments. Segments. Come on, bro. Give me what I want. You know what I want, bro? Oh, you just going to send me in circles over here? This is stupid. All right, no problem.

Oh, here we go. Okay, here we go. Mac. See, here we go. So, here's the Mac. The iPhone grew, Mac grew, iPad was flat, wearables were basically flat, and then services had growth right here.

So if we actually break down those percentages here, you had 254 divided by 209.5, 21.2% on iPhone. Mac had 12.4% with only one week of Mac Studios post uh AI upgrade. And then iPad iPad wearables flat services 1091.

That's not bad. 13%. What are they smoking? I I think that information article was smoking a little bit of something special. That 13% that's not bad at all for for Apple services, especially on this base.

I mean, look at their services revenue. $123 billion of services revenue. Now, this is the annual, right? So, maybe they're talking about the quarter. That's fine. But, uh, that's some incredible dollar right there.

Let's go bookmark that. Uh that's going to be the segment. And then if we go to the cash flow statement, here we go. Operating cash. C cash generated by operating. See, look at that cash flow, dude.

These people freaking print cash flow because those services are exploding. High margin services booming equals more cash flow, baby. Uh this is the company with cash flow. I mean, look at this.

They spent plant property equipment nine. They had 136 billion of free cash flow in the year. What's their market cap? Like five now.

I've got Apple sitting at right at the 332 line on reject 4.82 uh 136 divided by 482 equals you had a 2.8% cash flow yield at the business. It's okay. It's twice palunteers

and uh let's see here overall gross margin this is going to be the well let's look at products gross margin 215.8 divided by 355.533 60 their their gross margin is 39.4% 4%. Uh, that's more like 39%.

33 39.33 39.3%. Yeah, there we go. 39.3% on gross margin here. And last year that was 194ID 307 194ID 307 63.2 that's going to be 36.8. 36.8.

Okay. And then services, I've got 29358 divided by why? Oh, yeah. That's cost of sales is so low, dude. Gross margins is going to be so good here. Oh my gosh. This is a money printer, man.

So, all you have to do 29358 divided by 1233. Yeah, their gross margin is 76.2%. Versus last year, their gross margin on their services sat at 26844 divided by 10958 75.4.

Yeah, dude. Come on, man. That's in in this memory environment in this memory craze. Margins on both services and products up. That's peey. That's pretty good. Honestly, you gota you got to give him credit for that. So, I'm a big fan of that.

Yeah, we'll do a peg ratio for Apple, too. That's a good idea. In fact, um I guess I could do that really quickly now. We could do it for AMD as well. Yeah, let's do it for both of them.

Right now, Apple is more expensive. At least my recollection is that Apple is more expensive. More expensive, but um Max Studio Growth may be underpriced has been my thesis on it.

Uh so that's going to be 331 divided by 947. Oh my gosh. Equals and then 3495. Their forecast growth is usually by Wall Street somewhere around 9%. I think their growth is going to be higher than that, but I will take a look at what they got here.

856 / 1068 856 8 9 / 4 9.1 is the current forecast for Apple. So that's that's the forecast there. Uh Apple only justifiable if you think uh EPS growth can grow faster. I do think that as their memory costs come down, you know, put in 16% for example and you're sitting at 218, but it shows you kind of like where your hurdles are for this company, right?

Apple's got about twice the cash flow yield as Palanteer.

Daisy chain together two Mac Studios, which in fairness, Apple just had their earnings and their pricing power is actually expanding during a time that memory prices are going to the moon."

And then it makes you wonder, wait, how is Apple expanding their margins during that time? And I got to say, I don't know, but they're pulling it off. Uh, look at their income statement.

Uh, right here, you can see that Apple's gross margins on products sit at 39.3%. Last year, they sat at 36.8. So, you actually have substantial margin improvement despite or I should say in spite of memory prices skyrocketing.

Even their services margins went up. That's pricing power. That's impressive.

All this crap is going to get run on AMD chips, on Nvidia chips, on Apple computers, on AS6 that are manu uh that are designed by companies like Marll and Broadcom.

Well, I'll tell you. AMD and Apple, I love them. I've got exposure to them. They are not the cheapest options right now. Uh Apple sits at a valuation pretty expensive based on Wall Street's estimates, although I think their numbers are going to be wrong.

Wall Street only projects 9% growth for Apple. I think that'll be a lot higher. The last earnings report they had only had one week of new Mac Studio sales. They're going to blow this growth out of the water.

Uh so I put them closer to 16 to maybe even 20% growth, which puts them close to a toupe. But they're also very strong balance sheet. Fortress cash flow, you know, twice the free cash flow as Palanteer. Pretty good.

So, Apple was two uh based on a higher growth rate.

Instead, put a little bit into Marll, a little into Broadcom, a little into AMD, a little Apple, a little Nvidia. Get a little Microsoft in there. I don't like Google, so I'm not touching them.

I don't mind a little Amazon, a little SpaceX and Tesla, you know, to me that's a bucket that's going to be deliciously gory glorious over over time.