Last Saturday, I spoke about the “Magnificent Seven” stocks: Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL), Apple Inc. (AAPL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA) and Tesla, Inc. (TSLA). I reviewed the earnings of the four that had reported earnings last week and discussed their focus on artificial intelligence.
This week, another one of the Magnificent Seven companies was up to bat with its quarterly results: Apple.
Not only that, but Apple also held a special event this past Monday called “Spooky Fast” to unveil the newest addition to its product lineup.
In today’s Market 360, let’s dive into Apple’s fourth-quarter earnings report. We’ll review what was revealed during the “Spooky Fast” event. Based on the earnings report and the special event, it’s clear that Apple is going all-in on artificial intelligence. So, I’ll also share if investors should be going all-in on AI, too.
Let’s dig in…
Apple’s Earnings Results
Apple posted its fiscal fourth-quarter earnings report on Thursday, November 2, after the market close.
Earnings came in at $1.46 per share, which beat analysts’ estimates for $1.39 per share. This is up 13.2% year-over-year from earnings of $1.29 per share in the same quarter a year ago. Revenue of $89.50 billion also beat expectations of $89.42 billion, although it dropped slightly from $90.1 billion in the same quarter last year.
This marks Apple’s fourth-straight quarter of a revenue decline.
Digging a little deeper into the details…
- iPhone sales of $43.81 billion rose 2.8% year-over-year.
- Mac sales of $7.61 billion were down 33.9% year-over-year.
- iPad sales of $6.44 billion were down 10.2% year-over-year.
- Wearable sales of $9.3 billion fell 3.4% year-over-year.
The bright spot in Apple’s report was its Services revenue. Services revenue, which includes subscriptions, streaming TV, warranties, advertising, and payment services, rose 16.3% year-over-year to $22.31 billion. This also beat analysts’ expectations for revenue of $21.35 billion by 4.5%.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness and Apple One directly contributed to the overall service growth for the quarter. And currently, the company has over 1 billion paid subscriptions. During the earnings call, CEO Tim Cook stated that “every main service hit a record.”
Now, when it comes to artificial intelligence, Cook says:
If you kind of zoom out and look at what we’ve done on AI and machine learning and how we’ve used it, we view AI and machine learning as fundamental technologies, and they’re integral to virtually every product that we ship. And so just recently, when we shipped iOS 17, it had features like Personal Voice and Live Voicemail. AI is at the heart of these features…
He continues on:
In terms of generative AI, we have – obviously, we have work going on. I’m not going to get into details about what it is, because as you know, we really don’t do that. But you can bet that we’re investing quite a bit, we’re going to do it responsibly and you will see product advancements over time where those technologies are at the heart of them.
Following the earnings report, Apple shares opened nearly 2% lower on Friday.
Apple’s “Scary Fast” Event
On Monday, October 30, Apple held a “Scary Fast” event to unveil its all-new MacBook Pro.
During the event, CEO Tim Cook announced that the new MacBook Pro lineup would feature the all-new family of M3 chips: M3, M3 Pro and M3 Max. This new M3 family brings even more performance and remarkable capabilities to the MacBook Pro.
These are the first chips built for personal computers using the industry-leading 3-nanometer technology. With a faster, more efficient next-generation GPU, these chips will be the biggest leap forward in graphics architecture for Apple.
Not only that, but these chips feature a new technology called Dynamic Caching, which allows the chip to use the exact amount of memory needed for each task.
Other new features enable more visually complex scenes and enable games to render more accurate shadows and reflections to create more realistic environments. It’s also important to note that the 3-nanometer technology that these chips are built with can support advanced graphics and artificial intelligence.
During the special event, Apple’s senior vice president of Hardware Engineering, John Ternus, stated:
With the next generation of M3 chips, we’re raising the bar yet again for what a pro laptop can do. We’re excited to bring MacBook Pro and its best-in-class capabilities to the broadest set of users yet, and for those upgrading from an Intel-based MacBook Pro, it’s a game-changing experience in every way.
Position Your Portfolio for the AI Revolution
From the comments from CEO Tim Cook to the “Scary Fast” event noting the new chips that support AI, artificial intelligence is still very much front and center.
The reality is AI is popping up everywhere these days as the AI Revolution continues to steamroll the country.
And Apple, as well as other big tech companies, sees the imminent opportunity on the horizon. To take advantage, all you have to do is apply my “Billion Dollar Tech Blueprint” to the AI market and you could turbocharge your investment portfolio in a major way.
I firmly believe that this AI boom we’re witnessing will be the biggest opportunity of the next decade. And it will work best if you act now while the majority of AI-related stocks are still small and relatively unknown. The AI boom is just getting started and you don’t want to miss out.
That’s why I created this urgent message to share with you how my time-tested “Billion Dollar Tech Blueprint” can properly position your portfolio for the chance to make the most money possible from the AI Revolution.
(Already a Growth Investor subscriber? Click here to log in to the members-only website.)
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)
