4. Apple Inc. (NASDAQ:AAPL)
Market Capitalization as of September 14: $3383.75 billion
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is one of the world’s largest technology companies by revenue, known for its consumer electronics, software, and services.
The revenue in FQ3 2024 was up 4.87% year-over-year and reached $85.78 billion. The services division set a record at $24.2 billion, growing 14% year-over-year. iPhone revenue reached $39.3 billion, despite a slight decline. Moreover, Mac revenue grew 2% to $7 billion, and iPad revenue surged 24% year-over-year.
The company also launched Apple Intelligence, a personal intelligence system backed by AI. Apple Inc.’s (NASDAQ:AAPL) iPhone event in September unfolded as anticipated, with attention shifting to pre-order data and sales figures for the new iPhone. A survey by US AlphaWise indicated that about 60% of customers planning to upgrade are doing so because of Apple Intelligence. Even more advanced AI features will further roll out in 2025.
On August 29, The Wall Street Journal reported that Apple Inc. (NASDAQ:AAPL) is considering a significant investment in OpenAI, alongside NVIDIA, as part of a funding round led by Thrive Capital that would value OpenAI at $100 billion.
Currently, 184 hedge funds are long AAPL. Berkshire Hathaway has the highest stake in the company, with a position of $84,248,000,000.
Baron Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“The Fund’s chief relative detractor was Apple Inc. (NASDAQ:AAPL), even though it was a meaningful contributor to absolute performance, as we added to our Apple position significantly during the period. We bought Apple well, but in 20/20 hindsight we didn’t buy enough. Because Apple has an oversized weight in the Benchmark (its average weight was 15.7% for the period), when Apple’s stock outperforms (it appreciated 23.0%), it has generally been a headwind to relative performance. Our Apple underweight accounted for 33% of our relative underperformance for the period.
This quarter we increased the size of our position in Apple Inc., a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago. The increasing services mix has led to healthy operating margin improvement, providing more free cash flow for Apple to reinvest in the business and to distribute to shareholders. Throughout its 48-year history, Apple has successfully navigated and capitalized on major technological shifts, from PCs to mobile to cloud computing. We believe the company’s leading brand and device ecosystem position it to do equally well in the AI age, and this was the driver of our decision to re-invest. “Apple Intelligence” – the AI strategy unveiled at Apple’s recent Worldwide Developer Conference – leverages on-device AI and integrations with tools like ChatGPT to enhance user experiences across its ecosystem. The AI suite enables users to create new images, summarize and generate text, and use Siri to perform actions across their mobile applications, all while maintaining user privacy and security. We think Apple Intelligence can drive accelerated product upgrade cycles and higher demand for Apple services. The combination of growth re-acceleration, increasing services contribution, and thoughtful capital allocation should continue driving long-term shareholder value.”
