Today, we examine Apple closely as a new Systematic Portfolio holding. AAPL’s Multi-model position has been long every day since the formal launch in late June, carried mostly by the ML and Regime models reading risk-on.
The June quarter was a genuine growth recovery, with revenue up 16.4%, double-digit growth in every region and a June quarter record in every product line but iPad.
The tension is what comes next. The September guide steps down to 9% to 11%, and only about 2.5 points of that is currency, while memory prices are compressing gross margin in what Cook called a “100-year flood”. Apple’s answer so far has been to raise prices on iPad and Mac, and whether customers absorb that is untested.
This is a cash cow that sat out the hyperscaler CapEx war and handed the money back instead, returning 91% of free cash flow last quarter. The valuation is a touch rich at 10x EV/Sales, about +1 sigma of its three-year history, and my own valuation target of $327 sits around 3% above the last close.
I am happy to follow the Systematic Portfolio on this one. What I am watching is the September 9 event, where John Ternus announces his first lineup as CEO.
DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
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