Past performance does not predict future results. Informational only, not investment advice.
Apple is the only AI infrastructure stock with a positive strict owner earnings yield of 2.8%, matching its base case yield. While still below the author's >10% threshold, it is less unattractive than peers on an owner earnings basis.
AAPL is repeating a bearish pattern from late July with a break below 329.5 support, and has exited the upward channel that defined recent trading. Author expects downside and is positioned with short-dated put options.
Apple relies on external partners for AI and search capabilities while managing capex conservatively, resulting in recent earnings misses relative to consensus. The business model contrast with Microsoft's infrastructure-focused strategy suggests relative weakness in the AI era.
Apple will wait until the AI hype burns out, then ship incremental on-device intelligence features years late at premium prices. The company's user base doesn't need advanced AI—they just want battery life and green bubbles.
Author expects AAPL to fill a gap between $310 and $330, holding call options expiring this Wednesday. The position targets upside movement in the near term.
AAPL's recent rally is driven solely by liquidity parking with no fundamental support. Market makers will pull liquidity away from AAPL on opening bell to feed a sharp market-wide decline, creating a setup for put profits.
Apple is a key support for the broader market with 7% SPY weightage and has not yet peaked like other top contributors. Its low IV allows for leveraged upside as it becomes the next large-cap performer to drive market gains.
Author was bullish on Apple through Oct 31 expiry, holding 900 contracts of 260 calls. Position declined significantly as part of broader portfolio collapse.
Apple trades at a 30+ P/E ratio despite slowing 4-6% revenue growth, iPhone stagnation, failed innovation (Vision Pro, cancelled car project), and competitive weakness in AI. Regulatory attacks on Services margins and loss of market share in China to Huawei are exposing a premium valuation disconnected from deteriorating fundamentals.
Buffett's massive sale of Apple stock will trigger forced rebalancing buying from index and passive funds, providing technical support and upward pressure on the stock price.
Apple's share buybacks at a 27x multiple represent poor capital allocation and value destruction, similar to past mistakes by other companies. At current valuations, investors would receive better risk-adjusted returns from short-term securities than owning AAPL.
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