Apple: The Pre-Order Data Will Tell Us The Truth Soon

Summary:

  • The iOS 18 promised to make iPhones more personal and intelligent, which could drive future sales – at first glance at least, that’s true.
  • Apple’s Q3 revenue of $85.8 billion and GAAP EPS of $1.4 beat consensus estimates, driven by geographic expansion and record services revenue.
  • New Apple Intelligence features could drive future iPhone upgrades, but declining mobile carrier upgrade rates pose a long-term risk.
  • My DCF valuation suggests AAPL is fairly valued at best, preventing a “Sell” rating but not justifying a “Buy” rating.
  • We will have to wait for the pre-order data (lead time) to tell to what extent AI will be a game-changer for AAPL.

Apple Store

Nikada/iStock Unreleased via Getty Images

Intro & Thesis

I initiated coverage of Apple Inc. (NASDAQ:AAPL) (NEOE:AAPL:CA) stock in December 2021 and gave the stock a ‘Hold’ rating, pointing to the strength of the brand but also a


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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