Apple Inc

Apple is positioned to benefit from the rapid adoption of artificial intelligence and digitization, which is driving exponential demand for computing power and efficiency tools. The company is highlighted for its hardware ecosystem and services, which are integral to this trend. The manager notes that Apple, along with Amazon, is trading at reasonable valuations given its strong prospects, making it a selective investment in the technology sector. This strategic positioning allows Apple to capitalize on the ongoing digital transformation and maintain a competitive edge.

While Apple has overlapping network effects and powerful switching costs that create strong current pricing power, we have grown concerned that Apple’s high margin services business may be undermined by price-shopping AI agents that evade Apple’s large app store toll. Additionally, the company’s supply chain in China would cost more in time and money to replicate in the event of a war than we previously understood. These factors lead us to believe that Apple faces significant long-term risks to its pricing power.

The letter discusses the performance of the Core Portfolio and mentions Apple among other companies that were strategically trimmed due to their higher price-to-earnings ratios. However, there is no specific argument made about Apple's future performance or valuation.

We initiated our Apple investment in 2016 and elevated it to a core holding in 2018, the same year the company unveiled its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s far-sighted leadership, Apple has continually redefined innovation across hardware and software. Today, Apple’s ecosystem powers about 2.4 billion active devices, bolstered by a rapidly expanding subscription services base. This approach has supercharged customer engagement and spending. In fiscal 2025, the high-margin, stable subscription services segment accounted for roughly 42% of total gross profits, up from about 39% the previous year. We expect rising revenues from new product launches, services, margin expansion, and share repurchases to fuel approximately 10% annual growth in earnings per share over the next several years.

Apple contributed to performance as adjusted earnings per share grew +13%, driven by +15% revenue growth in its services business, which accelerated compared to last quarter and generated over $100 billion in revenue over the past 12 months. Further, the Company guided to strong double-digit revenue growth in its holiday quarter, driven by double-digit growth in iPhone revenues, as it experienced strong demand after launching several new models in the previous quarter. Apple's multi-decade consistency in executing on hardware and software upgrades, along with increasingly proprietary silicon content, provides consumers with a dependable, high-quality user experience that should continue to drive adoption and trade-up.

AAPL shares rose in 4Q25 following better-than-feared iPhone 17 sell-through trends and stronger Services momentum. The company reported that early adoption of its on-device AI features exceeded internal expectations, particularly in North America and Europe, where attach rates for Pro models remained elevated. We continue to view Apple as one of the world’s most resilient and profitable businesses, supported by a massive installed base, ecosystem lock-in, and growing high-margin revenue streams. With strong cash generation, ongoing share repurchases, and disciplined capital allocation, Apple remains a compelling long-term investment.

Apple is mentioned as one of the great businesses owned by AGT Partners, which continues to demonstrate resilient earnings growth over the past year by leveraging the strong economic moats they possess. However, there is no explicit directional argument made about Apple's future performance or valuation in the provided passages.

Apple Inc. shares rose strongly in the quarter following better-than-expected fiscal Q3 results and optimism around the company’s AI strategy. Total revenue of roughly $94 billion grew 10% year-over-year, led by a 15% increase in iPhone sales and another record in Services revenue of $27 billion. Investors responded positively to Apple’s ability to offset macro and China-related headwinds through product innovation, margin expansion, and continued growth in its recurring Services business. We believe Apple remains one of the most innovative and durable franchises in global technology.

Apple's shares rose strongly in the quarter following better-than-expected fiscal Q3 results and optimism around the company’s AI strategy. Total revenue of roughly $94 billion grew 10% year-over-year, led by a 15% increase in iPhone sales and another record in Services revenue of $27 billion. Investors responded positively to Apple’s ability to offset macro and China-related headwinds through product innovation, margin expansion, and continued growth in its recurring Services business. We believe Apple remains one of the most innovative and durable franchises in global technology.

Apple could eventually use its combination of privacy and edge computing to further monetize its valuable position as the personal operating system for over a billion customers. For example, if Apple’s AI agent becomes the consumer’s trusted assistant, the company would gain even more leverage over the other players in its ecosystem. It could also potentially use further algorithmic advances to manufacture wearables that more accurately track health and even predict future medical risks and needs.