The Long Term Investor

DEFINITELY....TireSmoke. I see that the traders swept into the market at the peak of the day with about 50 minutes left and tanked the gains.

It was kind of a stealth sell off at the end of the day. It has all the hallmarks of an AI PROGRAM TRADING....late day drop. So....It does give me good hope for tomorrow.

In any event...I was in the red today....with the late drop. I had four stocks GREEN....AMZN, MSFT, PLTR and GOOGL. I got beat by the SP500 today by 0.92%.

 

YES.....you never see or hear anything about the poor small businesses. They are the silent majority of the American economy. they are being destroyed by what has been going on for the past 4 years. Add in the impact of constantly increasing government regulation and taxes and they are being HAMMERED.

Sounds like a good plan for your cash Zukodany. My opinion....short term money....needed within, at the VERY minimum two years....should never be in the markets.

 

Well the markets are up and running. A normal green open that is now fading.

We are NOT in a technical correction since none of the big averages are down by 10% or more. BUT...some individual stocks are in correction......not a shocking or abnormal thing.

BUT.....the current markets are exhibiting skittishness and very erratic behavior......especially short term. The markets are allowing themselves to be jerked around by short term daily news items to the extreme. I "feel" like there is a general underlying unease with investors when it comes to the markets and society and culture in general. It is hard to have a good strong market when everyone it tiptoeing around waiting for the next shoe to drop.

My "feel" of what is going on in the REAL day to day economy is that people in general are close to hitting the wall with rising prices. So is small business. I see it daily now over the past 6 months. Business seems to be down at most of the places that we go to regularly.

We have not changed any of our behavior....but prices are getting to the point of being way out of control. for example I go to a dry cleaner that had really good rates. Two years ago they were charging $3.29 to dry clean any one garment.....now two years later it is $5.49. That is a MASSIVE increase. I dont go in there very regularly since I dont have to wear any sort of work clothes......but I do dry clean all of my music shirts and pants. When I go in the worker is never the same. I can tell they are really struggling to keep workers.

I dont know how regular people with kids at home, and a house payment, bills, etc, etc, are making it month to month.

On the positive side......this is certainly a big wall of worry. We are far from any sort of over exuberant market.

Little weak spots like this are routine in any year. How long they last and when they will end is never known in advance. There is no schedule. You will know it is over when it is over.

 

YOU know....I have NEVER heard any investor talk about this. I hear and see it in the media.....but....to me looking at our demographics and the number of people coming into the country each year....it is a JOKE TOPIC.

No Need to Cry Over Falling Birthrates
Fewer babies needn’t doom the economy.

https://www.fisherinvestments.com/e...entary/no-need-to-cry-over-falling-birthrates

(BOLD is my opinion OR what I consider important content)

"Last year, the fewest number of babies were born in the US since 1979. This isn’t a uniquely American phenomenon. From Germany to China, birth rates have been trending down worldwide, prompting handwringing over a baby bust’s long-term global economic and market impact. But it is a mistake to presume birth rates have a predetermined effect of any kind—especially since they aren’t even assured to keep falling.

After a pandemic boomlet, US births returned to their longer-term downward trend. According to America’s Centers for Disease Control and Prevention, 3.59 million babies were born in 2023, down -2% from the prior year.[ii] The general fertility rate—which refers to the total number of live births per 1000 women aged 15 – 44—fell a third-straight year, to 54.4.[iii] The total fertility rate (which estimates the number of children a woman would give birth to in her lifetime) was 1.62, the lowest since government records begin in the 1930s.[iv]

America isn’t alone in having fewer children. In the UK, the total fertility rate in England and Wales has been falling since 2010 (through 2022), while Germany’s birth rate hit its lowest level in over a decade last year.[v] In China, the number of babies born has fallen seven straight years despite the government relaxing the one-child rule.[vi] Declining births inspire visions of shrinking populations in the world’s biggest economies, leading to a reduced labor force and declining consumption that will struggle to drive economic growth.

But hold on. Fertility rates have fallen before without hindering US economic growth. Both the general fertility rate and total fertility rate have trended downward since 1970. (Exhibit 1) Moreover, the latter has trailed the “replacement rate” of 2.1—the rate that would allow a generation to replace itself—for most of the past 50 years. Yet these trends didn’t prevent the economic booms of the 1980s and 1990s—or derail America’s 2009 – 2020 economic expansion.

Exhibit 1: America’s Fertility Rates Since 1970


Source: National Center for Health Statistics, as of 4/30/2024. 2023 data are provisional.

The reason, in our view: Demographics are a long-term structural issue. Changes take years—even decades—to become apparent. They are also only one variable among many contributing to the economy’s development. A nation may have fewer young people due to fewer births, but what if its older people live and work longer—and spend accordingly? That activity contributes to economic growth. Or what if the country trends toward factory automation, necessitating fewer workers? Or if other technological developments boost productivity such that a smaller workforce is no issue whatsoever?

Then, too, birth rates aren’t guaranteed to fall indefinitely. The number of births fell from 1970 – 1973 and then flatlined through 1976. But from there, births climbed throughout the 1980s as late Generation X and the Millennials entered the world. Birth rates also normally fall as societies get wealthier. Rising living standards mean longer lifespans, while reduced infant mortality enables people to raise thriving families with fewer births. In contrast, nations with the highest birth rates also suffer more poverty—which is associated with shorter lifespans and higher infant mortality rates.

Yes, falling birth rates could have negative long-run ramifications if a true reduction in human capital and other factors don’t offset this. But that isn’t a given since a lot can change in the near and distant future. Ongoing technological advances can allow a smaller workforce to do more with fewer people. Birth rates could rebound, as they did in the 1980s. Societies could make political decisions (e.g., on immigration) that impact their population. Even if fewer babies pose a problem in the long run, stocks look 3 – 30 months out and move most on surprises. Demographic trends are widely known and well-telegraphed. Society won’t wake up tomorrow to a precipitous drop in the population—these shifts take a long time to become reality, removing any surprise power they have. And, thus, mitigating market impact.

Concerns about fewer babies are rooted in the notion population growth is tied to economic growth (i.e., any slowdown or decline in the former will hurt the latter). We have seen varieties of this false fear here and abroad (e.g., worries in the UK that output by person, as measured by per-capita GDP, is declining, which bodes ill for the future). But demographic concerns percolate in headlines regularly, similar to handwringing over the dollar or debt. To us, this says more about where sentiment is today: When well-known false fears grab eyeballs, skepticism remains pretty prevalent, suggesting the wall of worry bull markets climb remains high.


MY COMMENT

We have the highest population we have ever had in all history of the USA. At the same time we are in the very early start of an AI boom. I put the odds of some sort of declining birth rates impacting the economy of society at....ZERO....considering all the demographics of the population and the people being added to the population every year.

Now if I wanted to get into fear mongering over demographics....I would talk about the destruction of the middle class and the hollowing out of the middle portion of the economy and the population. I would talk about the growing gulf between the ELITES and the rest of the country. Etc, etc, etc.

BUT.....I dont talk about that "stuff" because I simply....DO NOT CARE.

As an investor and as a citizen...there is nothing I can do. ALL I can do is try to watch out for my own family. SO...that is my entire focus...especially considering that my life expectancy is somewhere between a few years to about 25 years maximum.

 

The big story of the day......for many of us.

Apple to report Q2 earnings amid iPhone slowdown, China troubles

https://finance.yahoo.com/news/appl...iphone-slowdown-china-troubles-195309204.html

My expectations are pretty low. I also think the expectations of the "experts" are pretty low. As a result it is not a very high bar to end up with an earnings BEAT.

I have no idea how APPLE will do. One thing is clear....I will continue to own the stock going forward.

 

Looks like the markets have weathered the first little dip of the day and have now gone back up some and stabilized.

 

No one is ever happy of satisfied........woe is me.

Unforgiving investors want bumper earnings after record rally

https://finance.yahoo.com/news/unforgiving-investors-want-bumper-earnings-083155180.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) — It’s taking bumper corporate earnings and profit forecasts to impress investors this season, after a record first-quarter rally left stocks looking expensive.

S&P 500 firms are more than halfway through the reporting period and 79% of them have beaten profit expectations, according to data compiled by Bloomberg Intelligence. Yet, the median stock outperformed the index by less than 0.1% on results day — the smallest margin since late 2020.

And firms missing expectations are suffering the worst punishment in the data’s records going back to 2019, lagging the S&P 500 Index by a median of 3.7%.


Examples abound. On Wednesday, shares in Norwegian Cruise Line Holdings Ltd. sank 15% despite a forecast-beating result and improved profit outlook. The reason? High expectations fueled by a rival cruise liner’s result. The same day, electricals firm Eaton Corp. dropped as investors gave a thumbs down to its forecast-topping earnings.

The malaise hasn’t spared Europe either. Novo Nordisk A/S, which makes the weight-loss drug Wegovy, slipped even as it raised its profit outlook.

The main reason, many reckon, is the S&P 500’s 28% rally from its October lows through end-March, which raised expectations of strong profits. Markets were also at the time betting on multiple interest-rate cuts from the Federal Reserve, a tailwind that’s now all but disappeared.

A price-to-earnings ratio of over 20 had left the index “nearly priced to perfection,” said Michael O’Rourke, chief market strategist at JonesTrading. “Therefore when a company disappoints, prices are likely to readjust sharply lower.” A resilient US economy also makes “it hard to have confidence in the outlook of a company that has stumbled.”

US stocks have faltered after hitting a record high in March, on signs the Fed will delay cutting rates amid sticky inflation. Stagflation concerns have resurfaced as US economic growth posted a surprise slowdown last quarter. Investors are therefore keen for clues on how management teams plan to navigate waning consumer confidence.

Here, too, there’s been some disappointment.

Data from Bespoke Investment Group shows that on average, 4.4% of US firms have raised guidance this quarter, the smallest proportion since the same period in 2020, when the Covid pandemic upended the economic outlook.


Many companies that came through with strong forecasts did reap rewards. Eli Lilly & Co., for instance, rallied by the most since August 2023 as its popular obesity drugs enabled it to boost full-year revenue guidance. NXP Semiconductors NV surged after issuing upbeat targets for the second quarter. Social-media company Snap Inc., industrial equipment firm Trane Technologies Plc and chipmaker Amkor Technology Inc. were also among the beneficiaries of robust outlooks.

But even before the earnings season, options markets were pricing smaller profit-driven moves on average compared with the previous quarter, according to data from JPMorgan Chase & Co. At the same time, investors were bracing for the highest earnings-related volatility in a year and a half, the figures showed.

Strategists at the bank, including Mislav Matejka, had warned in mid-April that a solid season wouldn’t translate into stock market gains as investor positioning was already “very stretched.” Morgan Stanley’s Michael Wilson has also blamed the jump in Treasury yields for taking the shine off earnings.

AI burden

Another sensitive area for investors is artificial intelligence. After almost a yearlong equity rally fueled by the AI frenzy, they want to see evidence of how companies are adopting the technology, said RBC Capital Markets strategist Lori Calvasina.

“I’m seeing an intolerance for the ‘we need to be patient” conversation,” Calvasina said in an interview on Bloomberg Television. “The ‘wait and see, this is going to take time’ — investors don’t seem to have a lot of patience for that.”

Not everyone is pessimistic on the season.

Deutsche Bank AG strategists said a strong scorecard from S&P 500 firms was already prompting analysts to raise targets for the second quarter, in contrast to a 1% reduction that’s typical at this stage of a season.

For Scott Chronert, head of US equity strategy at Citigroup Inc., the burden for further stock gains is squarely on earnings, given higher valuations and a more hawkish outlook on interest rates.

“Thus far, the earnings season has been mostly a beat-and-hold event,” Chronert said."

MY COMMENT

We continue to....climb a WALL OF WHINING. Earnings have actually been good. Of course any smart CEO is not going to go out on a limb and give overboard guidance. it is much safer for your job and for your company to be moderate in your guidance.

The greatest danger to the markets.....the media. The BALONEY regarding rate cuts is the perfect example. The media started pushing the rate cut story-line about a year to a year and a half ago. At that time no one was really talking about rate cuts....we were all simply focused on the FED stopping the hikes. From than till now....the media has pushed rate cuts story-line daily in the financial news. NOW....it has become the IRRATIONAL focus of the short term markets.

As usual....but in a more extreme fashion amplified by the constant 24/7 opinion media....the short term markets are simply IRRATIONAL and NOT based on REALITY.

 

I like this little article.

Big Tech's AI spending spree comes with a catch

https://finance.yahoo.com/news/big-techs-ai-spending-spree-comes-with-a-catch-141925941.html

(BOLD is my opinion OR what I consider important content)

"The message from Big Tech executives is clear: Buckle up, we're going to spend a lot more money on artificial intelligence. Amazon (AMZN), Alphabet (GOOG, GOOGL), Microsoft (MSFT), and Meta (META) have all revealed aggressive new commitments to advancing the technology in the first quarter earnings season. Such announcements have drawn mixed reactions from investors.

Wall Street is paying close attention to how the biggest names in tech are executing their AI strategies and wielding their balance sheets to do it. But even if the AI hype is backed with billions of dollars in new investments, shareholders are focused on where these significant increases in capital expenditures will lead.

"Given the billions of dollars that Big Tech companies have been pouring into the AI boom, investors are cautious that this may ultimately result in infrastructure overbuild minus the promised future profits," said Nicole Tanenbaum, partner and chief investment strategist at Chequers Financial Management.

The spending sprees are historic market gambles, but they are also bold shows of strength. Executives are mobilizing vast resources. Tech companies and their shareholders are clinging to the promise of not just profitability but a pathway to dominance in the next tech era.

"The companies see a tremendous opportunity with generative AI and view it as a platform shift potentially on par with the internet or cloud," said Michael Farr, chief market strategist for Hightower Advisors and founder and CEO of Farr, Miller & Washington.

Spending mode

Amazon on Tuesday became the latest tech company to flag its swelling capital expenditures (capex).

CFO Brian Olsavsky said that overall capital expenditures are expected to "meaningfully" increase this year, up from 2023's figure of $48.5 billion, driven by higher infrastructure costs to support growth in AWS, including generative AI.

Perhaps anticipating that many observers have moved to the "show me the money" phase of AI development, Olsavsky highlighted that generative AI revenue is already at a multibillion-dollar run rate.

That made the capital expenditures figure easier to digest. And investors largely adopted an optimistic view, lifting the stock. As analysts at UBS wrote in a note Wednesday, "higher CapEx is as clear a signal as any that there is upward bias to our AWS estimates for 2Q24 and beyond."

Alphabet wowed Wall Street in its own way. Google's parent announced a new dividend program and expanded buybacks, softening the blow of ballooning capex that hit $12 billion for the quarter — a figure that CFO Ruth Porat said will likely rise.

Microsoft also described its whopping $14 billion in capex for the last quarter as a starting point. CFO Amy Hood said the company expects capital expenditures to increase "materially," driven by cloud and AI infrastructure investments.

"The biggest takeaway on the huge AI capex spends is that the megacaps are not content to harvest their current markets, and all have confidence in their ability to expand their revenue base," Farr said.

Coming off the tech industry's COVID-era slump and a prior year filled with drastic layoffs and cost-cutting initiatives, a sharp jump in capex can be hard to accept. The infrastructure required for AI expansion is expensive: The tech giants are each coalescing around a ballpark figure that will likely exceed $50 billion in 2024.

The ability to make substantial investments in frontier tech with largely unproven business models is its own reflection of power. Only a handful of companies can fork over tens of billions of dollars. The deep pockets of Big Tech are unrivaled. But the market is eager to see more advancements in AI, aside from flexing more computing strength, Farr said.

That's partly why the reaction on Wall Street has not always been positive. Investors clobbered Meta stock after CEO Mark Zuckerberg said it would take years for the company to reap returns for heavy AI spending.

Other factors are at play, however. Leading up to earnings, Meta's stock was on a tear, showering investors with massive appreciation. As Baird strategist Ted Mortonson noted after the report, the positioning of the stock, as compared to the middling performance of Alphabet heading into its own earnings, set Meta up for a fall.

Meta also stands apart from Big Tech's other AI players. The social media company doesn't have a cloud business to serve as a foundation to peddle new AI services.

Whereas Microsoft, Amazon, and Alphabet can make money from their AI computing infrastructure and by applying AI to their own products, Meta doesn't have an Azure, Amazon Web Services (AWS), or Google Cloud Platform (GCP) to lean on. Meta has its ad empire, of course, but Llama, its large language model, is open source, making monetization less certain.

"Less certainty is another way of stating more risk, and risk is being priced accordingly," said Farr. "Zuckerberg asked investors to trust him on it."

The other companies might have more to show for their investments and leeway to spend. But no AI play this early in the game is assured."

MY COMMENT

I am sure there will be MUCH wasted money....but....none of these big cap companies can afford to stand back and wait and watch. They all have to jump in with both feet and simply see how it all sorts out.

It will all come down to engineering and management. Who has the vision to see the future......who has the ability to achieve it ......and.....who is able to turn it into MONEY for shareholders.

As an investor......if you look at my Portfolio Model....I am obviously riding the wave of AI and BIG CAP TECH. I see no other option....for me. BUT.....that does not mean everyone has to do so. There are many GREAT BIG CAP companies that are more conservative businesses. There are many GREAT dividend producing companies that make good steady money. There are also many GREAT Indexes like the SP500 that are more moderate and less aggressive than the cutting edge of big tech.

I say...investors should pick and choose what matches up best with their long term goals and risk tolerance. Unfortunately people often seem to simply look at the long term goals side of things.....to MAKE MONEY..... and tend to ignore the risk tolerance side to things.

 

STILL....a good day for the markets. We are past due for some gains driven by good earnings. We need to string together a couple of good market days to end the week. If so....I will be happy with the week.....and move forward.

It is not like I have any choice....anyway.

The typical words to live by.....COURAGE....ENDURE.....PATIENCE.

 

At this moment.....I am starting the rest of the day strongly in the GREEN. I think I have a single stock that is very mildly in the red today.....SMCI. No surprise there after yesterday.

The market day starts.......NOW.

 

OK....some collector talk.

Bored Ape Yacht Club NFTs sold for millions in 2021—prices have dropped 90% since then

https://www.cnbc.com/2024/05/02/bor...-floor-price-sinks-ceo-announces-layoffs.html

LOL.....NFT's.....buyer beware in my opinion. Shelling out millions for this junk is CRAZY. I have yet to meet a collector that has bought an NFT. BUT...I dont hang around with a lot of millionaire and billionaire elites.

There are many strange categories of collectables.....like Magic Cards.....that I do not buy, but they make sense. They have a HUGE collector base of very dedicated fans......and....so far they have managed to stand the test of time. They are also sold and priced through the auction system. AND...values tend to follow rarity and card condition. The cards are graded, etc, etc, etc.

The WORST mistake made by novice and/or uneducated collectors......buying manufactured collectables......at crazy prices.

The way to avoid this....do some research. Is the item sold at auction? Are there thousands of the item for sale on eBay at highly inflated prices? Do any of them ever sell? Is the item a FAD.....like Beanie Babies?

There is NOTHING WRONG with buying a collector plate.....of a print by Thomas Kinkade......for home decor. If you like something and wish to have it in your home.....GREAT. The problem comes when items that are nice home decor and appreciated by many people....are sold as collectables.....with the subtle underlying sales pitch that it is an "investment".

Buying something that you love and want in your home is a good thing. EVERYTHING does not have to be about money or value. Beauty is in the eye of the beholder. BUT...if the underlying SUBTLE sales pitch is about money and the item being an investment.....BEWARE.

 

As to the above.....yes....like all collectors "WE" have made many mistakes along the way. Like investing...that is just part of the learning process.

 

Does anyone here own Chipotle? Approximately number 100 in the SP500. Has anyone on here researched the stock?

No I am not buying the company at this moment. But I was researching companies in the top 100 of the SP500 for the futurre and it came up. This seemed to be the best general article that I could find on them.

Is Chipotle Stock A Buy Ahead Of Its Large 50-For-1 Stock Split?

https://www.forbes.com/sites/invest...ock-buy-ahead-of-stock-split/?sh=1e9b80657e2f

Thoughts?

I am not usually a fast-food investor....but their expansion plans to double over the near to medium term as described in this article is interesting.

 

COOL...a nice BIG gain today in my stocks. EVERY one in the green. The leaders by percentage gain today were....NVDA, SMCI, and AMZN. PLUS....a big beat on the SP500 today by 1.36%.

A great way to head into the APPL earnings today.

 

GOSH.....I did not know we were fearing more FED rate hikes today.

Stocks climb as Fed rate-hike fears fade, with Apple on deck

https://finance.yahoo.com/news/stoc...-fears-fade-with-apple-on-deck-133130849.html

(BOLD is my opinion OR what I consider important content)

"US stocks strode higher Thursday in a calm after the Fed day storm, as investors set aside rate worries for now to focus on Apple (AAPL) earnings and the coming monthly jobs report.

The S&P 500 (^GSPC) rose roughly 0.9%, while the Dow Jones Industrial Average (^DJI) gained about 0.8%. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 1.5%.

Stocks are recovering from Wednesday's volatile session dominated by the wait for the Federal Reserve's policy decision. Chair Jerome Powell played down the likelihood of an interest-rate hike, bringing relief to investors worried that recent signs of "sticky" inflation might prompt that move.

As Powell again stressed the Fed is still depending on data to shape its thinking, the April jobs report due Friday is in full focus. Wall Street is watching for any signs of cracks in the strong labor market story, a key factor for policymakers.

Meanwhile, the OECD credited US outperformance as the reason the global economy is growing faster than expected, providing another reason for optimism.

Top of mind in earnings are Apple's quarterly results, expected after the market close Thursday. Wall Street is bracing for a decline in revenue and a potentially hefty pullback in iPhone sales in China. But there could be some potential bright spots for the "Magnificent Seven" megacap in its results."

MY COMMENT

OK.....nothing to see here....move on.

 

The APPLE earnings.

Apple announces largest-ever $110 billion share buyback as iPhone sales drop 10%

https://www.cnbc.com/2024/05/02/apple-aapl-earnings-report-q2-2024.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Apple’s fiscal second-quarter earnings were slightly higher than Wall Street expectations, but showed overall revenue down 4%, and iPhone sales falling 10%.
• Apple announced that its board had authorized $110 billion in share repurchases, the largest in the company’s history.
• Apple CEO Tim Cook told CNBC that year-over-year sales suffered from a difficult comparison to the year-ago period.

Apple reported fiscal second-quarter earnings on Thursday that were slightly higher than Wall Street expectations, but showed overall revenue down 4%, and iPhone sales falling 10%.

Apple announced that its board had authorized $110 billion in share repurchases, the largest in the company’s history, and a 22% increase over last year’s $90 billion authorization.

Here’s how Apple did versus LSEG consensus estimates in the March quarter:

• EPS: $1.53 vs. $1.50 estimated
• Revenue: $90.75 billion vs. $90.01 billion estimated
• iPhone revenue: $45.96 billion vs. $46.00 billion estimated
• Mac revenue: $7.5 billion vs. $6.86 billion estimated
• iPad revenue: $5.6 billion vs. $5.91billion estimated
• Other Products revenue: $7.9 billion vs. $8.08 billion estimated
• Services revenue: $23.9 billion vs. $23.27 billion estimated
• Gross margin: 46.6% vs. 46.6% estimated

Apple did not provide formal guidance, but Apple CEO Tim Cook told CNBC’s Steve Kovach that overall sales would “grow low single digits” during the June quarter.

Apple posted $81.8 billion in revenue during the year-ago June quarter and LSEG analysts were looking for a forecast of $83.23 billion.

Apple reported $23.64 billion in net income, a 2% decrease from $24.16 billion in the year-earlier period. Overall sales fell 4% in the March quarter.

Cook told CNBC’s Steve Kovach that year-over-year sales suffered from a difficult comparison to the year-ago period, when the company realized $5 billion in delayed iPhone 14 sales from Covid-based supply issues.

“If you remove that $5 billion from last year’s results, we would have grown this quarter on a year-over-year basis,” Cook said. “And so that’s how we look at it internally from how the company is performing.”

Apple said iPhone sales fell nearly 10% to $45.96 billion, suggesting weak demand for the current generation of iPhones, which were released in September. The sales were in-line with analyst estimates, and Cook said that without last year’s increased sales, iPhone revenue would have been flat.

Mac sales were up 4% to $7.45 billion, but they are still below the segment’s high-water mark set in 2022. Cook said sales were driven by the company’s new MacBook Air models that were released with an upgraded M3 chip in March.

Other Products, which is how Apple reports sales of its Apple Watch and AirPods headphones, was down 10% on an annual basis to $7.9 billion in revenue.

During the quarter, Apple released its first new major product category in years, the Vision Pro virtual reality headset, but the $3500 device is expected to sell in low quantities, especially compared to Apple’s major product lines.

“We’re only scratching the surface there so we couldn’t be more excited about our opportunity there,” Cook said.

Apple has not released a new iPad since 2022, which is a drag on sales. Revenue for the division fell 17% to $5.6 billion. Apple is expected to announce new iPads on May 7 that could revive demand for the product line.

Cook also said Apple has “big plans to announce” from an “AI point of view” during its iPad event next week as well as at the company’s annual developer conference in June.

Services was a bright spot during the quarter. Sales rose 14.2% to $23.9 billion. That’s how Apple reports revenue from its subscription services, warranties, licensing deals with search engines, and payments. Apple has a broad definition of subscribers, which includes users subscribing to apps through Apple’s App Store, and said that it has over 1 billion paid subscriptions.

Sales in Greater China, Apple’s third largest region, were off 8% to $17.8 billion in revenue, which was significantly better than the $15.25 billion in sales expected by FactSet analysts, potentially quelling investor worries that Apple may have been losing market share to local competitors such as Huawei.

“I feel good about China, I think more about long term than to the next week or so,” Cook said.

Cook told CNBC that iPhone sales grew in China during the quarter. “That may come as a surprise to some people,” Cook said.

In addition to the buyback authorization, Apple said it would pay a 25 cent dividend, a one cent increase. Apple’s $110 billion buyback authorization is the largest-ever announced, ahead of Apple’s previous repurchases, according to data from Birinyi Associates. '

MY COMMENT

I will call this a semi-beat. Probably good enough with the low expectations. I consider this the key info reported:

"Sales in Greater China, Apple’s third largest region, were off 8% to $17.8 billion in revenue, which was significantly better than the $15.25 billion in sales expected by FactSet analysts, potentially quelling investor worries that Apple may have been losing market share to local competitors such as Huawei. "

and

"Services was a bright spot during the quarter. Sales rose 14.2% to $23.9 billion....."

Looks good enough to me. the FEARS going in were not realized. Hopefully good enough to drive the stock and the markets tomorrow. With this one in the bag the next quarter should tell us if APPLE has turned the corner.

NOW.....they need to make some AI announcements to solidify their business going forward. They are very poor at playing the AI expectations game.

 

AND.....the initial reaction has the stock UP by over 5% in the after hours trading.

We will see the REAL reaction tomorrow.