$AAPL

Summary

The analyst is bearish on META and AAPL, arguing META struggles to grow new business lines and AAPL faces margin pressure from delayed upgrades and pricing cuts.

Reasoning

META has difficulty growing a second business line due to internal competition and survival instinct; AAPL's price increases may delay user upgrades, reducing revenue by $2.7B/year and forcing margin cuts, distracting management from growth areas.

MAG7 => BAG7 holders use the same basic argument over and over. "META has the largest user base in the world" "Nobody is going to stop buying iPhone" Obvious, surface level argument. I've been debating with $META for 2 months now. It's more complicated than that! My main thesis: It is incredibly hard to grow a second business line. I worked in multiple tech companies and I have never seen it done. The main business will always kick down any up and coming business out of survival instinct. (I was one of them). $META hasn't figured it out yet. Now they are investing in market prediction. Are you f*** kidding me? For $AAPL, of course, people will keep buying iPhones. But think about this: iPhone/iPad/Macbook has gone up 20%-30% in price. Let's presume small 5% of users delay their upgrades by 6 months (2 years upgrade cycle, staggered) then you multiply their entire customer base. This is complicated math, but it works out to be -$2.7B/year. The management freaks out, lower the price (cuts margin). While management trying to figure out what to say on the next earnings, it takes their attention away from the next growth area. Remember, they dropped the ball on iCar. Failed Agument VR. Compound the fact a new CEO coming in, trying to ramp up with his team (fire people, hire people), and laying out his roadmap. Also, Apple is a $4T company with high expectation to grow QoQ YoY on revenue/net income -- not a boring dividend stock. The good news is they are already paying dividend.

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