iPhone Duo, Apple Watch & Other Tech Enough to Lift AAPL?

0:00Let's focus in on Apple's chart. This has been one of the more fascinating stories, not only over the last 24 hours, but I will argue going back to late April. It's almost been the counter to the AI infrastructure trade. This has been a company that has not committed to buying and investing to the same extent that many of its mega-cap tech peers have. And sometimes on these days where you see the AI infrastructure trade under pressure, it stays like that where Apple is a bit more rewarded. That said, new CEO John Ternis led his first product launch event yesterday. Today's reaction to that launch event is the focus of today's morning trade. To help us with that discussion, we got trading 360 and marketing on close host Marley Kaden here with us. Marley, we discussed a lot of the products and the launches yesterday in your program. I broke some of the news that was coming through the wire on next gen yesterday. We've had almost 24 hours to digest things. And it seems like this foldable phone

1:00has just dominated the headlines. It certainly is. I mean, I think it's exciting. There's an argument to be made that it's an entrance into a new product category. It is still an iPhone. It's called the iPhone Duo, but obviously a new category in that it folds. It's not the traditional shape of an iPhone. It's hinged, although when it's opened, you can't really even tell. I mean, it really is well designed. It's their first foldable phone. It opens up into about a size of a passport. You can see it there on the screen. And it has a screen whether you have it folded open or whether you have it folded closed. It has a front facing screen. This is seemingly the big, exciting piece here coming out of this surprise and shine event. But they did do a complete overhaul of the new 18 line, the 18 pro and the 18 pro max. They have a smaller dynamic island. They have a better camera here. They have a 48 megapixel fusion main camera. They've got a lot more stops and terms of its ability to control depth of field and low light exposure. So likely trying to combat some of those complaints

2:01that perhaps the camera isn't just good as some of the other devices. Also has this new A20 chip in these new iPhone 18s. And there's this photo authenticity sensor that will allow you to tag that the photo was actually taken with an iPhone as opposed to being created by AI. And that's embedded in the device if you want that. In addition to that AI, there is now a full rollout of Siri AI in this iOS 27. Now it is running on a double power 16 core neural engine. But the really big thing here is this personal context awareness. It is going to use the data already in your Apple ecosystem to be personally aware of your needs, your desires, your content, what you keep on your phone or your Apple watch. So that includes your health data to add for health and wellness tracking. Something as simple as me looking for a gift card to a restaurant in my email. I can have it search my email, find me the gift card and make me the reservation. So we could potentially see a lot of improvements there

3:04in terms of Apple's AI usage. Although that's not really the conversation driver right now. I did have someone make an argument to me yesterday that that should be the conversation driver. The Apple Watch series 12 though has this big focus on AI health with this expanded AI rollout. There's a new casing. We also got a new AirPod iteration. It's iteration five now. They have more active noise cancellation in that base model. Now it's included. And we did see price increases though in the iPhone 18 Pro and Pro Max of $100 each. But the watch and the AirPods did maintain their pricing. Now as we talk about the pricing, this is where some of the analyst commentary comes in. City keeping a buy rating, $365 price target. They love this foldable phone. They say it's their biggest new hardware category since the AirPods. But I mentioned that pricing. Let's talk about JP Morgan. They say they're largely in line with expectations. Pricing was pretty much in line with the base case. But they think the numbers are below the larger increase that investors have been anticipating on the count of memory costs.

4:05They say they're walking a fine balance of absorbing those costs while keeping an opportunity for a positive cycle. They keep it overweight rating. B of A though lowering their price target to $370 from $380 keeps a buy. Says that the showcase from John Turner's most positive pricing came in lower than they expected. They are think it's going to drive higher units but puts some pressure on margins, rose in black, similar sentiment here. They said the light touch on pricing could weigh on its gross margins, of course, because the memory cost, Jeffries, really likes the foldable phone. They liked that there was a cheaper version at that 256 gig option. Thought that helped to improve affordability but also highlighted their protecting value at the expense of margin. So it's a margin concerns because the pricing increases weren't as high as thought. Yeah, and I gotta be honest, that product certainly made a splash in terms of catching attention. I was just having friends that, you know, bringing it up. I can't remember the last time an Apple launch did that despite the success of the Apple Watch and the AirPods over the years but Marley really appreciate it. Make sure you stay tuned as a Train 360 is coming up next here.

5:05So we say goodbye to Marley though. We welcome in Joe T. Gay. He's the portfolio manager of the Rational Equity Armor Fund. You know, Joe, I might wait for Gen 2 on a product that's significantly different but jokes aside, I wanna get your thoughts on Apple as a tradable product. Is this stock is seemingly broke correlation with many of its MegaCab tech peers? Yeah, you know, it doesn't have the same infrastructure, it doesn't have the same footprint, it doesn't have the same spend, thought of wine on all this AI trade. They're just gonna be banking on all of the money that open AI and all the money that it's dropping and Google is spending on AI is gonna filter into their ecosystem. I think that's a good bet. They're hoping that they're the wearable product that people will use as AI for. I think maybe that is exactly what people are excited about this launch. Yes, it is kind of a cool thing, this foldable phone. I'm not so sure people are gonna jump out and spend $2,000 for it. Maybe kind of looks like a tablet to me. Having said that, yeah, definitely cool, definitely really neat advancement

6:07and excited to see where that goes. Big blocking of the trend today, though the market's broadly down, Apple's higher. So for me, this is kind of like a big move up for Apple, not something I like to do going after and chasing stocks when they're in a big rally mode. And just looking at the overall market is a tough environment right now. We do have high oil prices, we do have high inflation, the market off of its lows this morning, but definitely September, it's seasonally a week time of the year. I just be looking and saying, hey, had a nice little run up here, if there is a pullback, I wouldn't want to be jumping in and buying it right here. I'd look at the September, just expiring in eight days here, $310, put $2.05 to collect here, almost a 4% protection to the downside here, if we do see a correction in Apple over the next week. And if it does pullback, I'll be happy to buy it down to $310. It took like $2.05 here for just a week on a $320 stock. That's a really nice yield for a week's worth of work.

7:07Good stuff, Joe, for I let you go. I know you're a volatility guy at Hadhard. The volatility story has been so nuanced this year. Under the surface, it's pretty tremendous, but the headline has been subdued as someone who managed a portfolio with volatility as a big part of that decision making process. How are you balancing those two things? Yeah, you're seeing individual stocks have tremendous volatility, specifically the semiconductor stock, specifically the AI trades, lots of volatility as we know. But I've said that, I didn't even see that dip in the semiconductor index or broadly in the AI trade. You see a non-correlated move happening in value stocks or some other part of the market, which is keeping the broader market subdued. Actually, when you're looking at a big picture, it tells the story of the market just higher on the year, given the fact you've seen all this uncertainty and everything else. But the economy is trucking along, yes, inflation is higher. We do know that, but the economy still is growing.

8:09And when you're seeing money being coming out of some sectors of the stock market, it's going right back to work and other sectors of the stock market. So yes, that is an interesting dynamic. What worries me on a volatility front is when you're seeing all stocks moving the same way, and that's when you see big downward moves and you see volatility, like the VIX index really start to get higher. Good stuff. Joe T.G. Oh, it was a pleasure. Thanks for joining us, support for William Andrew, the rational equity armor fund. Here's bestimmtey here. 2016 Love Stoon The