00:00Joining us for analysis is Matt Bloxham, Senior Analyst at Bloomberg Intelligence.
00:04Matt, we promised we'd get you back on after these results.
00:07What stood out to you in the guidance and the numbers?
00:10Yeah, I mean, I guess the supply constraint is an interesting angle.
00:13We've heard that across all of the big tech companies speak in different ways.
00:17You know, the demand for Apple products remains incredibly strong.
00:21Even though we complain about how relatively poor their AI capabilities are,
00:28people are still massively wanting to have Apple devices
00:31and using a different software on top to kind of get access to AI.
00:35So, yeah, overall very encouraging results.
00:36I think it's also interesting that in terms of the forward guide,
00:39they did point to bigger margin headwinds potentially coming
00:43as rising memory prices and chip prices generally start to flow into their kind of component costs.
00:50And how are we going to feel the incoming transition of CEO John Ternus?
00:55What's it going to really make a difference to?
00:58Yeah, I mean, I don't think we're going to see any massive changes immediately.
01:02This is going to be a very kind of gradual and carefully orchestrated transition.
01:06They're very similar people that come from very similar backgrounds.
01:08I think you potentially over time will see some greater sharpness
01:12in the kind of new product development timeframe.
01:15Certainly a lot of the kind of anecdotal feedback we've had is he's kind of much more focused
01:18on what the product set should be that they take forward.
01:21Obviously, a big question for him is how he addresses their AI issue and evolve that strategy.
01:26I think the other thing that they kind of signaled on the call was this slight shift in guidance
01:31around net cash and aiming for a net cash neutral position.
01:35They've got about $65 billion of net cash now.
01:38They're going to deliver almost a trillion dollars of buyback through this program
01:42with an incremental $100 billion.
01:43But they did say that they were very strong in saying that they invest in the business first
01:47and then anything left over goes to buybacks.
01:51Now, the question is, will they start to increase the scale of investments in the business,
01:55whether that's organically or inorganically?
01:58So maybe this kind of shift in guidance, even though it's subtle,
02:01might open a whole raft of new kind of debate about how they're going to use their balance sheet
02:06going forward to scale up, particularly on AI.
02:08Okay, so we've had Apple.
02:10We've had most of the Mag 7 reporting this week.
02:12We've only got NVIDIA left to report.
02:15What's the big thought that you'd leave us with at the end of the Mag 7 earnings so far?
02:20Yeah, so May 20th is that NVIDIA report.
02:23And I think for them, something we pick up on the early results,
02:25because yesterday is the fact that Google and Amazon are getting into the AI chip space.
02:31And so whereas NVIDIA is still clearly the kind of the king of the castle,
02:35there is going to be more pressure on them.
02:37And I think when we have this results update in May,
02:40there's going to be more probing about how they plan to protect their moat
02:44and manage that rising competition from the likes of Google and Amazon,
02:47who are massive companies and have huge cloud businesses
02:50and could really take a bite out of their crown.
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