In this issue:
$AAPL Network Value Model [Q3 2023]
$AAPL Logarithmic Trend Channel
Apple $3 Trillion Market Capitalization
Quarterly Earnings Update [Q3 2023]
How The iPhone Helped Save The Planet
Fundamental Investment Thesis
AAPL 0.00%↑ Network Value Model [Q3 2023]
📊 Active iPhones Network Value = $237 per share ($3.7T market cap)
🔼 +0.85% from from Q2 2023 ($235 per share)
🚥 Value Deflection = 🟡 0.75 (Fair Value = 1.00)
🏷️ Apple Q3 2023 Closing Stock Price = $191.17 ($3.0T market cap)
Note: Apple no longer discloses a breakdown of the number of active iPhones. Instead, it reports an estimate of active devices which is currently over 2 billion. Thus, the data science model extrapolates the number of active iPhones for its calculations for Network Value.
AAPL 0.00%↑ Logarithmic Trend Channel
Apple $3 Trillion Market Capitalization
In January 2022, Apple’s market capitalization reached $3 trillion for the first time and remains the most valuable company in the world.
AAPL 0.00%↑ remains a mainstay in the investment portfolio since 2010 with anticipation of plenty of upside to come based on fundamental, technical, and quantitative analysis.
Note: Along the way, ignored analysts short-sighted negative growth outlook and instead followed learnings from MIT wrt technology adoption & network effects.
Quarterly Earnings Update [Q3 2023]
Shares of AAPL traded down 2% after posting what was essentially an in-line June quarter. Guidance for September calls for a 1% y/y decline in revenue compared to expectations of 1% growth.
Those details water down the most important dynamic of the quarter: the installed base of active devices hit an all-time record. That means Apple's ecosystem is expanding which is key for long term investors. This growing base should power revenue growth acceleration in December and for full year 2024.
Key Takeaways
The June quarter was as expected and September guidance was slightly below the Street.
The most important data point from the June quarter was the installed base of active devices set an all-time record.
India is an important part of the Apple growth story and it's just getting started.
Investors are missing the potential of Vision Pro.
Ignore the noise as the active iPhones is what drives the Network Value Model above. Based on the model, the anticipated return by 2030 is almost a triple (2.85x) based on the current price.
How The iPhone Saved The Planet
Over the years, iPhones have helped dematerialize consumption of countless other products (e.g. MP3 player, camera, camcorder, tape recorder, clock radio, calculator, mobile telephone, etc).
Fundamental Investment Thesis
Along with the iPhone’s strong foothold in the luxury smartphone market, the following areas are where Apple is looking to maintain its competitive advantage and increase growth prospects.
Services
Next phase of Apple services push is going to spur on growth (e.g. Health, AR/VR/Metaverse, entertainment, etc).
Silicon
In 2020, Apple announced it would transition its entire Mac lineup from Intel to custom designed/built Apple Silicon. This will provide significant competitive advantage that is being underestimated.
Disclaimer
*** AlphiQuant publishes its research & analysis for purely educational purposes and is not licensed to provide financial advice nor is it registered with any financial regulatory body. Perform your own research and consult your financial advisor for investment advice. ***