Apple is seeing only limited effects from economic pressures that are hitting consumer electronics sales, says Jefferies analyst Kyle McNealy.
Inflation has remained high, and electronics companies are beginning to expect that consumer spending is going to start showing that everyday people are feeling the heat. Best Buy (ticker: BBY) reported earnings Thursday, and told investors that it expects demand for consumer electronics to be pressured this year.
HP (HPQ), a seller of personal computers, said this week that there has been a continuing decline in demand for PCs that is hurting quarterly sales.
But Jefferies analyst Kyle McNealy wrote in a research note Thursday that his analysis of global web traffic suggests that Apple (AAPL) isn’t suffering in the same way. “Page traffic is running well ahead of consensus as suggested by the month-over-month sequential growth in January for all products except iPhone which is approximately in-line,” McNealy wrote.
“We see page traffic tracking ahead of expectations as a positive sign that Apple isn’t seeing as much macro pressure as anticipated, at least through January,” McNealy added.
He maintained his Buy rating on the stock, with a target of $195 for the price.
MacDailyNews Take: Shocker.
Apple is best-positioned to weather inflation and recession due to its superior customer demographics. – MacDailyNews, February 3, 2023
We’ve been covering Apple in these pages for over 20 years and have seen Apple perform through multiple recessions.
It’s the non-Apple tech companies that are most at risk during a consumer spending slowdown since their consumers have less, and/or are less willing, to spend. Apple will be just fine, even in a recession. And, during any stock price declines, Apple’s massive buyback plan will be even more effective in retiring shares and providing support for shareholders. – MacDailyNews, October 4, 2022
Apple’s consumer demographics suggest that it could be resilient, even amid inflation. Plus, a very strong profit margin gives the company plenty of flexibility to absorb rising prices should the need arise. – MacDailyNews, November, 11, 2022
The most inflation- and recession-resistant big tech company is Apple, thanks to its superior customer demographics. – MacDailyNews, October 27, 2022
Apple iPhone customers are the most recession-proof smartphone buyers. — MacDailyNews, September 7, 2022
The same goes for Mac, iPad, Apple Watch, and Apple Services customers in personal computers, tablet computers, smartwatches, and subscriptions, respectively. – MacDailyNews, October 13, 2022
When your money becomes a greater concern, you want to spend it wisely… If it’s not an iPhone, it’s not an iPhone. Further, if it’s not an iPhone Pro, it’s not an iPhone Pro. – MacDailyNews, October 27, 2022
See also: Apple’s indomitable Mac keeps gaining market share at the expense of x86-based vendors – January 19, 2023
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It seems that making market projections about a huge industry, based on a sample size of two, is not valid scientifically – and risky.
Apple’s stock is being hit as hard as any other consumer tech stock, so it doesn’t seem as though Apple is bucking any consumer downtrend as far as investors are concerned. I don’t know how this analyst is drawing such a conclusion. I’m not complaining because as shareholders continue to dump Apple stock, Apple is repurchasing those shares at lower prices and now outstanding shares have dropped to 15.8B. If Apple stock goes lower, I consider that a good thing as my shares gain in value as Apple buys back more shares.
I fully understand big investors would rather dump Apple stock and buy into those companies who are hyping up their A.I. strengths to investors. A.I. is a smoking hot topic and it really excites greedy investors.
AI has proven the ability to spew lots of BS but no intelligence or ability to tell fact from fiction (a skill in short supply by some humans too). The problem will never be overcome in the way it is being deployed because the input data that lazy humans and chatroom-trolling AI bots gather is 99% opinion. Other than a smattering of government and university studies that the knuckle draggers dismiss anyway, the vast majority of high quality verifiable peer-reviewed scientific studies are available only behind corporate or industry group paywalls. Then there is the problem that some information has been superseded or has been proven wrong, but bad info or sheer marketing BS continues to be pushed by self-interested parties … tobacco industry, to name one, still planting their products in films every year. Thus, just like you see the open internet and most popular media is mostly garbage in, garbage out with humans …. it cannot possibly be much better with AI that has even less moral or ethical compasses. Even if Mr. AI was schooled exclusively on the Bible and the teachings of the Dali Lama, it would still covet your neighbor’s ass, enslave the next tribe, and stone the first offender. Humans should have evolved forward from the antiquated guidebooks with obviously bad moral teachings within its cover, and humans should have regularly amended its rules for federalization to keep up with the real world, but unfortunately the entrenched special interests love to time-travel to whatever point in the dung heap of history justifies their greed and malice today. The AI bot will only do this faster. You can always find a justification to do the wrong thing or cause harm. Outsourcing judgement to a robot so you don’t have to think is the height of human idiocy. The world depicted in WALL-E is coming faster than anyone could have imagined unless we reject this BS.
We can only hope that sue-happy lawyers will kill the first AI companies that aid in causing human harm, just as they will when self-driving vehicles kill and maim pedestrians. It would behoove Apple to take its sweet time before putting a 3rd party’s hyped up random function generator malware into its products. Moreover, it should have been demonstrated by now that the inability of Amazon to make any money from Alexa signals clearly that people don’t trust spy cans in their houses. Apple’s recent decision to copy Amazon and Google with a second round of talking marketing bobbins for your kitchen counter is a total waste of time. In this rare instance, I applaud Apple for being slow to the over-hyped party.
There are better things for Apple to do with its cash pile, and it isn’t stock buybacks. Apple needs to get better at offering software that lets the user control what he wants to control easily securely & transparently. It’s been a long time since Apple led the pack in GUI clarity, WYSIWYG performance, and simple processes. Long past time to get back to basics.
Leave AI to prove itself in controlled environments where it can aid in mining, farming machinery, or food canneries.