1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
Jim Cramer addresses recent changes in Apple Inc. (NASDAQ:AAPL)’s leadership, specifically the retirement of CFO Luca Maestri, a highly regarded executive known for his exceptional financial stewardship. Despite initial market reactions that saw Apple Inc. (NASDAQ:AAPL)’s stock dip slightly and prompted some to view the change with concern, Cramer remains confident in the company’s future. Maestri’s tenure saw Apple Inc. (NASDAQ:AAPL)’s revenue and earnings grow significantly, with Apple Inc. (NASDAQ:AAPL)’s market cap soaring from $547 billion to nearly $3.5 trillion.
“Apple’s C-suite is being shaken up, but I’ll tell you why it’s not shaking my confidence in the company going forward. Own it, don’t trade it. Apple’s stock briefly got rocked this morning after we learned that CFO Luca Maestri, one of the best in the business, is retiring. Luca is a hero. He’s been the steward of Apple’s cash and has done his best to add value for all shareholders, much better than almost every other CFO out there. So what happens to the stock upon the news of his retirement? It goes down a buck and a half in pre-market trading, and we get a host of notes saying that Luca’s decision is either a mild negative for the stock or a real negative—a reason to be worried and a cause of disappointment and concern.
It’s been 10 years for Luca, a little longer than the average CFO term, during which Apple’s revenues have compounded at an 8% annual clip, while its earnings compounded at a 15% clip. Apple’s market capitalization expanded more than six times, from $547 billion to nearly $3.5 trillion today. Luca has been incredible at planning the success of the service revenue stream, which is now close to $100 billion. He’s helped grow the company in key emerging markets like India, Turkey, Thailand, Malaysia, Brazil, and the UAE, which together are becoming a real force. I’d argue he’s been a genius when it comes to buying back stock, always purchasing it when it’s right, not just repurchasing shares by rote, as most CFOs do…
In the midst of an endless parade of commentators who want you to trade, many of whom make money if you trade, there is Apple—the one and only stock that’s run the way you want a company to run, which is why I always say own it, don’t trade it. I can’t think of a thing Apple does wrong when it comes to running the business day-to-day, and I know that Luca played a big role in that. The highest compliment I can pay is that I bet Kevin Park will do exactly the same.”
Apple Inc. (NASDAQ:AAPL) offers a strong investment opportunity due to its leadership in technology innovation, growing ecosystem, and solid financial health. Apple Inc. (NASDAQ:AAPL)’s recent product launches, including the iPhone 15 series, iPad Pro, and new MacBook models, showcase its commitment to cutting-edge technology and have been positively received by consumers, strengthening its market position. Apple Inc. (NASDAQ:AAPL)’s ecosystem, which integrates its hardware, software, and services, is expanding rapidly. Investments in its Services segment—such as Apple Music, iCloud, and Apple TV+—along with recent advancements in AI, are boosting recurring revenue and improving customer engagement.
Additionally, Apple Inc. (NASDAQ:AAPL)’s strategic investments in emerging technologies like augmented reality (AR), artificial intelligence (AI), and health technology, including the new Apple Watch Series 9, position it well for future growth and continued market leadership. Overall, Apple Inc. (NASDAQ:AAPL)’s innovation, expanding ecosystem, strong financial standing, and forward-looking investments make it an appealing investment choice.
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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