Apple: Relatively Immune From AI Disruption
==========
Apple's business is not directly impacted by the introduction of knowledge-on-demand apps like ChatGPT. The company's strong market position, user stack advantages, and services distribution leverage insulate the company and make it an attractive investment opportunity. Trading at a reasonable price, we think AAPL looks like a 'Buy'. Since the release of ChatGPT in November 2022, the tech world has fundamentally shifted. Companies from across the spectrum have begun to search for generative AI use cases to improve business operations. One company that has been virtually silent on this topic? Apple. While the company does have a number of products that could be affected by changes to the AI landscape, like Siri, the company's business isn't directly impacted by the introduction of knowledge-on-demand apps like ChatGPT. AAPL's hardware remains in high demand, and the company's unbeatable physical network means that its premium service & content offerings shouldn't be impacted much by the changes. Apple's primary business is the design and sale of personal computing devices, including the iPhone, iPad, Mac, Apple TV, Apple Watch, and most recently, the Vision Pro. These devices cover the gamut of touchpoints between the human experience and technology. Apple has then built a secondary services business on top of this hardware ecosystem, where it provides access to an apps marketplace, along with financial services, content offerings, productivity apps, and more. Competitively, here are the key reasons why we like AAPL's Market Position. 1.) UX Advantages: AAPL's products are front and center in user experience, which is a massive inbuilt advantage that's bound to endure. 2.) Services Insulation: AAPL's high margin, high growth services segment shouldn't see much in the way of disruption from recent genAI advances either. 3.) The Vision Pro: Apple's recent Vision Pro launch shows that the company still has its eye towards the future of computing. AAPL's valuation is reasonable, trading at a 7.6x sales multiple and a 29x earnings multiple. However, on a historical basis, the stock does appear to be trading at a 'midpoint' of sorts, hovering around the 5-year linear regression trend point. Despite the risks, AAPL is a one-of-a-kind opportunity in the market today. With a strong position in personal computing and a powerful top-of-funnel leverage point, it's hard to see the company losing business as a result of the genAI gold rush. Therefore, we're upgrading our AAPL rating to a 'Buy'.
#Apple #AiDisruption #Chatgpt #KnowledgeondemandApps #Hardware #Services #Valuation
https://seekingalpha.com/article/4696148-apple-relatively-immune-from-ai-disruption
Seeking Alpha /
npub1qpf…damf
2024-05-29 11:09:15
Author Public Key
npub1qpfrthtcf6g8grmwfv45qf28aa4xqk73pgnmwjdfuze8zl2l2cnsewdamfPublished at
2024-05-29 11:09:15Event JSON
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"content": "Apple: Relatively Immune From AI Disruption\n==========\n\nApple's business is not directly impacted by the introduction of knowledge-on-demand apps like ChatGPT. The company's strong market position, user stack advantages, and services distribution leverage insulate the company and make it an attractive investment opportunity. Trading at a reasonable price, we think AAPL looks like a 'Buy'. Since the release of ChatGPT in November 2022, the tech world has fundamentally shifted. Companies from across the spectrum have begun to search for generative AI use cases to improve business operations. One company that has been virtually silent on this topic? Apple. While the company does have a number of products that could be affected by changes to the AI landscape, like Siri, the company's business isn't directly impacted by the introduction of knowledge-on-demand apps like ChatGPT. AAPL's hardware remains in high demand, and the company's unbeatable physical network means that its premium service \u0026 content offerings shouldn't be impacted much by the changes. Apple's primary business is the design and sale of personal computing devices, including the iPhone, iPad, Mac, Apple TV, Apple Watch, and most recently, the Vision Pro. These devices cover the gamut of touchpoints between the human experience and technology. Apple has then built a secondary services business on top of this hardware ecosystem, where it provides access to an apps marketplace, along with financial services, content offerings, productivity apps, and more. Competitively, here are the key reasons why we like AAPL's Market Position. 1.) UX Advantages: AAPL's products are front and center in user experience, which is a massive inbuilt advantage that's bound to endure. 2.) Services Insulation: AAPL's high margin, high growth services segment shouldn't see much in the way of disruption from recent genAI advances either. 3.) The Vision Pro: Apple's recent Vision Pro launch shows that the company still has its eye towards the future of computing. AAPL's valuation is reasonable, trading at a 7.6x sales multiple and a 29x earnings multiple. However, on a historical basis, the stock does appear to be trading at a 'midpoint' of sorts, hovering around the 5-year linear regression trend point. Despite the risks, AAPL is a one-of-a-kind opportunity in the market today. With a strong position in personal computing and a powerful top-of-funnel leverage point, it's hard to see the company losing business as a result of the genAI gold rush. Therefore, we're upgrading our AAPL rating to a 'Buy'.\n\n#Apple #AiDisruption #Chatgpt #KnowledgeondemandApps #Hardware #Services #Valuation\n\nhttps://seekingalpha.com/article/4696148-apple-relatively-immune-from-ai-disruption",
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