Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
Apple's Starlink Mobile exposure makes paying over 35x forward earnings hard to justify. A quoted summary of BofA's analysis says a rival carrier could erode iPhone subsidies, a cheap Starlink phone could take share, and a rival ecosystem could challenge Apple's pricing power; BofA calls the near-term risk manageable and retains its Buy rating. x.comÂ
Apple is a sell here because buybacks are replacing innovation while its share price is dangerously extended. It is not spending on AI, in cloud services, making robots or pursuing global WiFi; its VR, Siri chatbot and iCar efforts have failed. Its flip phone follows Samsung's, and AirPods have poor battery life and microphones. The share price has held up, but only for now. x.comÂ
Apple's weak Mac and iPhone demand and soaring costs threaten worse Q3 results and Q4 guidance than its weak Q2. IDC estimates Mac sales fell 11% y/y in Q3 after rising 13% in Q2. Counterpoint says Pro sales rose just 3% in the first three weeks while overall iPhone sales fell; lower-end models are absent this year. Foldable yields are reportedly 60%, and $100 price hikes may not offset costs. At $5 trillion, 39 P/E and 11 times sales, Apple's crowded 'safe haven' looks vulnerable. x.comÂ
Apple's balance sheet and lack of spend keep a bid under its stock whether the market rises or falls. That bid gets stronger with foldable phones that break. x.comÂ
Apple's ecosystem lock-in and virtually nonexistent groundbreaking innovation since AirPods make it one of the slimiest companies in the stock market and a stock to never own. It has admitted throttling older iPhones, charges developers 30% in the App Store, limits interoperability to keep users locked in, and earns billions in Services revenue from customers who struggle to leave. Its model extracts as much as possible from captured users. x.com x.comÂ
Memory-cost pressure, weak volumes and weak services should make Apple's quarter bad, giving the short a chance to work on this quarter alone. Other hardware companies this quarter also point to weakness, though Apple has been a terrible short so far. x.com x.comÂ
Meta and Apple are in a long-term race to build practical VR glasses that could break the iPhone's two-decade stranglehold in the 2030s. Meta started light and comfortable but must add orders of magnitude more power; Apple started with the powerful but bulky Vision Pro, essentially a prototype, and must shrink it. They may meet in the middle in the early 2030s. Meta's new glasses are a big leap forward, but this is still the first inning, and owning both makes sense. x.com x.com x.comÂ
Apple ranks dead last among the Magnificent Seven because it is the only one that has completely stopped innovating, and it is on course to become irrelevant. That puts it below Tesla, which @antibearthesis ranked last in a Mag 7 buy list that placed Apple sixth. x.comÂ
Qualcomm is hurt by plunging consumer smartphone sales. Counterpoint Research's preliminary estimate puts global Q3 2026 shipments down 20% year over year, the lowest Q3 since 2012. Apple outperformed Android but was still down. x.com x.comÂ
Apple's Duo could spur a bigger upgrade cycle because its foldable form factor gives users a new reason to buy. It reportedly sold out within minutes, but Foxconn's roughly 60% assembly yield may exaggerate demand; sustained lead times as yields improve could support 2027 revenue. Early costs may pressure margins and local AI monetization remains unproven. Premium hardware and local AI could make Apple the world's most valuable company again. x.comÂ
A round-number chase pushed Apple to a $5 trillion valuation. The market did the same with Walmart at $1 trillion earlier this year; it is probably a little early, but this is where an Apple short becomes worth considering. x.comÂ