SEC filings reveal that Warren Buffett sold more Apple Inc. (NASDAQ: AAPL) shares in the most recently reported quarter. That was the bad news. The good news was that the company had a strong quarter. Worries that the new iPhone 17 would sell poorly were misguided. However, its stock performance is lackluster. So far this year, Apple is up 14%, which is no better than the broader market.
24/7 Wall St. Key Points
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Though Apple Inc. (NASDAQ: AAPL) had a strong quarter, its stock performance this year has been lackluster.
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Apple shareholders have plenty to worry about.
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Apple’s topline and iPhone revenues last quarter were strong. Total revenue was up 8% to $102.5 billion, and per-share earnings rose 13% to $1.85. Tim Cook, Apple’s CEO, said, “Today, Apple is very proud to report a September quarter revenue record of $102.5 billion, including a September quarter revenue record for iPhone and an all-time revenue record for Services.”
iPhone sales rose from $42.6 billion in the year-ago quarter to $49 billion. But the good news ended there.
China is the largest smartphone market in the world by far. Although the market share there changes often, Apple is up against local companies Huawei, Vivo, Xiaomi, and Oppo. Some of these companies already have artificial intelligence (AI) features on their products. Apple’s Greater China revenue dropped from $15.0 billion last year to $14.5 billion. That means Greater China is only 14% of the company’s revenue.
Apple is still, by most definitions, in last place in the AI race across America’s mega-cap tech companies. It has no public-facing AI product. It does not have a cloud business on which it can use AI to capitalize. In fact, Apple is at least a year behind the industry.
What About AI?
Apple was supposed to announce advanced AI features with the launch of the iPhone 17. Not only did it miss that target, but no AI product is due until early next year. There are rumors that Apple will use a Google AI product and pay Alphabet a huge amount to do so. That makes it captive to Google’s success in the sector. Google competes with several huge public companies, like Microsoft, and several private ones, led by OpenAI. Other companies have hired away several of the top engineers Apple brought in to lead its AI efforts.
There is still a chance that AI will never be successful as a paid product for consumers. Perhaps it will eventually be considered no better than an advanced form of Google search.
Finally, worry has begun about who will replace CEO Tim Cook. When Steve Jobs stepped down, it looked like Cook would be a downgrade. That has not been the case. In the past five years, Apple’s stock is 132% higher. The market is up 89% over the same period. Cook took over in 2011. He is now 65 years old. He may not leave soon, but the guessing has started.
Apple’s shareholders have more than one thing to worry about.
Apple Stock Price Prediction and Forecast 2025–2030
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