5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a multinational technology company that designs, manufactures, and sells personal computers, smartphones, tablets, wearables, and various accessories and software, best known for its iconic products such as the iPhone, iPad, Mac, and Apple Watch. Its focus on user experience, innovative design, and ecosystem of products and services has made it one of the most valuable companies in the world.
The company’s FQ3 2024 revenue rose 4.87% as compared to the year-ago period, with services reaching a record $24.2 billion, up 14%. iPhone revenue was $39.3 billion, while Mac and iPad revenue grew 2% and 24%, respectively. iPhone 16 shipments are lower than last year, with shorter wait times for Pro Max models. Initial iPhone 16 series pre-orders are down 12.7%. Overall, iPhone 16 Pro models have largely met expectations but the base model and 16 Plus have not matched last year’s figures.
Despite initial iPhone 16 demand concerns, the company’s stock rose 3% in two days, reaching its highest close since July, as reported this Tuesday, October 14. Analysts are optimistic about Apple Intelligence’s potential to drive a “stronger-for-longer” upgrade cycle, with price targets reaching $265. However, recently, Huawei has surpassed Apple Inc. (NASDAQ:AAPL) as the leading smartphone brand in China, driven by factors such as nationalism, economic conditions, and trade restrictions on Huawei, causing sales to decline for Apple Inc. (NASDAQ:AAPL).
Its AI tool, Apple Intelligence, could boost demand in the US market. Apple Inc.’s (NASDAQ:AAPL) long-term decline in mobile carrier upgrade rates raises concerns about the impact of Apple Intelligence on device upgrade cycles. Despite potential challenges related to iPhone upgrade cycles and the services business, strong brand recognition, innovative product lineup, and expanding ecosystem position the company for continued growth.
Vltava Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“You probably have not missed the news that Warren Buffett has already sold half the stock from his largest public markets investment, Apple Inc. (NASDAQ:AAPL). It was a phenomenal investment for Berkshire. Over the course of seven years or so, it brought a profit of well over USD 100 billion. Apple comprised a very large position within Berkshire’s public portfolio, and this was the reason we avoided Apple stock outright during that time. We considered our exposure to Apple through our holdings of Berkshire stock to be sufficient, and we ended up making a lot of money on it. There has been a great deal of speculation in the market about what Buffett’s sale of Apple signals regarding his view of the stock market. I think the reason for the sale is much simpler. Buffett probably considers Apple stock so expensive that he prefers to cash in at 20% less (after all, Berkshire must pay tax on its profits). He started selling in the first quarter of the year. When I was in Omaha for the general meeting in May, Buffett said he was still selling, and I expect he continued to do so in the third quarter. I have to say that, as a Berkshire shareholder, I am happy about the Apple sale. I think Berkshire’s management will find a better use for this money, as they always have in the past. It is quite likely that they already have a very specific idea about this. If that takes two or three years, it does not matter at all. This is not a race and, in the meantime, the risk of holding Berkshire Hathaway stock itself has been greatly reduced.”
