Apple shares dropped 1.6% overnight to a week and a half low, as the market anxiously awaits the company's quarterly report on Thursday.
On Wednesday, Guo Ming-Chi, known as the "most insightful Apple analyst," made predictions about Apple's annual performance and AI progression. Guo believes that Apple's Q2 financial data won't be particularly remarkable and that progress in the AI realm has been slow. There are no signs of Apple integrating AI edge computing with hardware products in 2024.
On the subject of financial performance, Guo observed:
The second quarter of 2023 is traditionally a slow season, while Q3 2023 is a transition period for old and new iPhones. Hence, financial results and predictions at this time generally don't stand out. If Apple's recent EPS can surpass market expectations due to performance in services, lower component costs, and exchange rate changes, it will be beneficial for the short-term stock price.
An earlier article pointed out that, according to Refinitiv, the market generally expects Apple's quarterly total revenue to decrease by 1.6%, marking the biggest decline in quarterly revenue since 2016.
On the matter of slowed AI progress, Guo explained:
The company may not spend much time discussing artificial intelligence on the earnings call given its significant lag behind competitors in this field.
At present, there are no signs that Apple will integrate AI edge computing with hardware products in 2024, making it difficult to boost the stock prices of Apple and its supply chain on this basis.
Previous media reports said that pushing AI development has been a major task for Apple in recent months, with multiple teams collaborating on related projects, including attempts to solve privacy issues brought about by AI technology. However, Apple's executives haven't established a clear strategy or a clear plan to release AI tools to consumers.
On the topic of shipments, Guo noted:
A few suppliers in the Apple supply chain have a clear growth trend (such as increased market share, spec upgrades driving ASP increases, etc.), but Apple's hardware product shipment estimates are weaker in 2H23 compared to 2H22. Unless Apple explicitly expresses optimism about market demand in 2H23 or 2024, this earnings report likely won't positively impact the majority of supplier stocks.
Most component shipment plans did not significantly change in Q4 2022. Unless demand following the launch of the iPhone 15 exceeds market expectations, most suppliers will face growth pressure in 2H23 due to lower iPhone 15 demand compared to the iPhone 14.
Regarding Apple's recently launched Vision Pro, Guo predicts that its 2024 shipment estimate is still quite small, making it difficult to boost Apple's stock price and that of its supply chain.
