Missed out on 3 trillion Apple, you still have Tesla

Gelonghui Finance ·  12/07/2023 09:12

Talented people from the Eyama Dynasty

It's been 12 years since Jobs passed away.

Over these 12 years, Apple has grown into the world's largest and most profitable smartphone manufacturer. As of today, Apple's market capitalization has already more than doubled tenfold, breaking through 3 trillion US dollars, ranking first in the world.

These are Apple's best times.

However, at the same time, there are fewer and fewer disruptive innovations from Apple. Until now, they have almost ceased to exist. The innovative projects that Jobs promoted during his lifetime have also basically lost their word. The toothpaste-like innovations that have been repaired and repaired in recent years have also caused consumers' enthusiasm and expectations for Apple to gradually wane.

The global focus on the metaverse, smart cars in full swing, and generative AI, which is currently in full swing, has seen many tech giants participate in every wave, yet no substantial action has been seen from Apple.

Until now, every day after a new Apple product is released, it is rare for consumers to line up at the experience store, and there are obviously not as many scalpers frying new products as before.

Although Apple is still gradually showing new market capitalization levels, the pace of its growth seems to be gradually slowing down.

Will Apple be a thing of the past?

01 Buffett's bet

Lao Ba, who has always avoided investing in technology stocks, began buying Apple in 2016 and is buying more and more.

By the end of the third quarter, Apple had become his biggest heavyweight stock, accounting for more than half of the market capitalization, reaching 157.24 billion US dollars.

It can be said that the old bus gave half of its life to Apple. As long as Apple's stock price fluctuates greatly, the market value of Berkshire Hathaway's holdings will also fluctuate greatly.

In Q3 this year, Buffett lost a huge loss of 12.77 billion US dollars, which was actually caused by a sharp drop in Apple's stock price.

Why is it important to mention 2016 as a point in time?

Because this is a watershed point in the capital market's view of Apple's investment logic.

Buffett is a very special person. He has adhered to his value investment theory all his life and has never changed.

Therefore, being looked upon and bought by Buffett is a very iconic event.

He won't buy tech growth stocks casually.

Therefore, in 2016, there was a big discussion in the capital market. Is Apple still considered a technology growth stock?

If I had to calculate it, would Buffett turn lethal?

If you don't count it, then how do you explain that Apple phone sales are actually still growing rapidly, and profits are constantly reaching new highs?

In 2016, Apple had annual revenue of 215.639 billion US dollars, net profit of 45.687 billion US dollars, and market value of more than 500 billion US dollars; by 2019, annual revenue was 26.174 billion US dollars, net profit was 55.256 billion US dollars, and market value exceeded 1 trillion US dollars for the first time.

In other words, Apple's revenue and net profit have only increased by more than 20% in three years, yet its market value has doubled.

Judging from performance alone, this growth rate is no longer considered a technology-based high-growth stock; on the contrary, it is more like consumer stocks.

Before buying Apple, Buffett said one thing, “When I saw that my great-granddaughter and her friend almost all had an Apple phone, and they couldn't do without an Apple phone, I realized that Apple's customer loyalty was very high, and Apple's own products were also very valuable.”

Obviously, Buffett hasn't changed; he just sees Apple as a consumer stock with a very high moat.

Therefore, the conclusion is already obvious. Since Buffett bought Apple, Apple is no longer a technology-based high-growth stock, but a consumer stock with a real moat.

02 Cook's plight

Since Jobs' death, Apple's disruptive innovation came to an abrupt end.

The Apple TV and Apple Car that Jobs promoted during his lifetime have had no news until now. This may have something to do with Cook.

Cook can definitely be called a successful businessman, but certainly not a successful innovator.

However, even though Cook does not have the disruptive innovation ability of Jobs, it does not prevent Cook from promoting Apple's performance and stock price to the world.

From 2011 to 2022, during the Cook era, Apple's performance increased rapidly by 4 times, while its market value increased 10 times.

From the perspective of doing business and investing alone, to be able to do this, what would a husband look for?

It doesn't matter if it has disruptive innovation. Isn't the pursuit of innovation in business just to make money?

There's really nothing wrong with saying this.

However, Apple has also been questioned quite a bit because of this. The most important point is that the entire company is on Jobs' credit card.

Yes, Jobs' legacy can keep Apple going for 10 years. The only question is, what will Apple rely on in the next ten years?

Virtual reality, intelligent vaporization, or AIGC?

Over the past decade, Cook has had countless opportunities to prove that he can lead Apple to a new legend in terms of innovation.

But in the end, he went above and beyond in terms of making money that even Jobs was unable to achieve.

Almost none of these disruptive innovations actually came to fruition.

In 1985, Scully, the CEO that Jobs dug up from Pepsi, publicly defected, and in the end, Jobs was forced to leave Apple, which he founded.

Since then, Apple has become more mediocre, and its light has been completely overshadowed by Microsoft. It wasn't until the return of Jobs in 1997 that it regained its brilliance.

In fact, the Apple company in the Scully era always ate what Jobs left behind. Scully may have done a good job in business, but he was always a salesperson and was completely out of touch with disruptive innovation. Otherwise, he wouldn't have been forced to leave Apple in 1993.

History is always strikingly similar. Today's Cook is a bit similar to Apple back then.

I just don't know, will Apple go back and forth and lose disruptive innovation, and will it be so poor that it only has money left?

03 The New King of Silicon Valley

When it comes to innovation, Silicon Valley has never lacked the talent to lead innovation.

Jobs was the most important representative of technological innovation in Silicon Valley after 2000, but with his death, it is also true that many of Apple's disruptive innovations came to an abrupt end.

Now, there are descendants who are striving to surpass him.

For example, Musk, or Ultraman.

These two people basically dominate the current global field of scientific and technological innovation.

Musk has made great achievements in electric vehicles, rockets, AI, and communication networks. In comparison, Ultraman focuses on the AI field.

Both have their own strengths, so it's hard to say who is superior.

However, as investors, you may be lucky because there will always be so many technology growth stocks to choose from.

If you think that Apple is no longer considered a technology growth stock, then Tesla is at least one, as well as unlisted Open AI, as well as electric vehicles, autonomous driving, and generative artificial intelligence concept companies derived from this.

The current Tesla FSD has evolved into the V12 version, and the word beta (test) has also been removed. Although Musk has always boasted and always skipped tickets, there is no doubt that FSD is getting closer to commercialization.

The recent excellent Huawei smart driving system is also amazing.

Intelligence may be late, but it's never going to be late.

There are many more AI applications, and so is it.

So, for many people, do they need to surrender half their lives to Apple like Buffett, the answer is obviously not needed. Because there are so many choices now, Apple is probably a good company that still makes a lot of money every year, but in the investment world, it is no longer a company full of imagination and limitless possibilities at the beginning.

Once imagination is lost, it's really not easy to get it back.

Of course, even if you give half of your life to Apple, he won't do anything to you, just make more and less. Even if you lose, as long as you can afford to wait, it will come back.

Fortunately, we have other options.

The same principle also applies to companies such as Tesla and Open AI that have demonstrated their innovative power enough.

04 Conclusion

Chinese people like to say that talented people came out in the Jiangshan Dynasty, and one generation was superior to the next.

This is also very suitable for Silicon Valley on the other side of the ocean.

From the earliest HP founders Bill Hewlett and David Packard, to Intel's Gordon Moore, then to Jobs, Gates, Larry Page, Sergey Brin, and Zuckerberg, now Musk and Ultraman.

The source is endless, and the life is endless.

You can't trust the US, but you can definitely trust its technological innovation and the investment opportunities it has created. (End of full text)


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