Early Thoughts on Tariff Impact on Apple’s Financials, Apple Valuation Update
Hello everyone.
Apple reports earnings on May 1st. We will go over my detailed earnings expectations early next week.
To tie up a few loose ends that are still outstanding on the tariff front, there is value in going over my early thoughts on how tariffs will impact Apple’s financials over the next few quarters.
After what seemed to be a good two to three years of noisy Apple quarters coming out of the pandemic, there were expectations that the second half of 2024 and 2025 would provide a cleaner look at Apple’s underlying business fundamentals. Given the various moving pieces related to tariffs, Apple's FY2025 may turn out to be a noisy year from a financials perspective.
Let’s jump in for more discussion.
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Wall Street Warms up to Apple, AAPL Valuation Update
Today's Above Avalon Daily email contains the following stories:
Wall Street Warms up to Apple
AAPL Valuation Update
Over at Above Avalon’s sibling site, Inside Orchard, my essay last week, "Big Tech Is Winning Over Wall Street," went over a Wall Street observation that has been on my mind for the past few weeks.
While NVIDIA was capturing many hearts and minds on Wall Street, a larger story was quietly unfolding in the background. Wall Street was turning decidedly more bullish on the broader Big Tech bucket (Microsoft, Apple, Alphabet, Amazon, Meta). The change in tone isn’t just attributable to AI either. That may come across as a shocking stance to hold - the Inside Orchard essay goes into more of my thinking.
For today, we will keep our focus specifically to how Wall Street is warming up to Apple. The discussion then turns to an examination of AAPL valuation metrics (forward P/E, EV/FCF, and free cash flow yield).
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