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3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Funds Investors: 158

In December, Dan Niles of Niles Investment Management said in a program on Schwab Network that he wasn’t much bullish on Apple Inc. (NASDAQ:AAPL) amid a slow progress on AI features.

“Apple’s sort of caught up in that. I think, relative to three months ago, the data, if you actually take a look at it, has been somewhat disappointing. The rollout has been much slower. In other words, you’re going to get another update to Apple Intelligence, which is their AI features, in December, but you won’t see a rollout in Europe until next year, hopefully in Q1. In China, we still don’t know when they’re going to roll out AI features. So, with the stock now having a multiple in the low 30s PE range, and by the way, the S&P is about 22 times, it’s looking pretty expensive. For me, Apple is not one that I would really be that bullish on right here. It’s just going up with the tape, but I think as we get closer to them having to report and guide, you may have an issue.”

Apple Inc. (NASDAQ:AAPL) shares are down about 12% so far this year.

Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:

“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.

The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.

Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.

Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”