Apple (AAPL) reports after the bell today.
Everyone expects a miss. Lots of people have already significantly cut iPhone and rev estimates. The stock has already fallen about 10% (correction territory) in just the last two weeks… so a lot of negativity is already priced in.
On the other hand, what’s NOT priced in are two biggies:
(1) Apple is going to talk about what it’s going to do with its MASSIVE repatriated cash horde.
I think this is going to be stunning… since I believe it may be the LARGEST cash repatriation EVER for a corporation.
All kinds of stock-positive things will be discussed… like significantly raising the dividend… or massively increasing buy backs… and so on.
So this will be a positive.
(2) The market is so totally fixated on iPhone that it sometimes forgets that Apple has other massive businesses, too… like services… like Mac… like iPad… and so on. And like the rest of tech this quarter, I think those will surprise to the upside as well.
So, my thoughts are these:
The bad news about iPhone is already mostly priced in, which I think minimizes or eliminates the downside.
The good news about repatriated cash usage and all the other Apple businesses are NOT priced in.
So I tend to think they’ll be more of an upside surprise than not. Which is counter to the way everyone’s going into this earnings call. As a contrarian, that’s scary but what I like as an investor.
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