Apple faces significant uncertainty as a new CEO takes the helm.
Apple faces significant uncertainty as a new CEO takes the helm.
As we begin the holiday quarter, Apple (AAPL +0.09%) is in a time of transition. John Ternus took over as CEO from Tim Cook on Sept. 1, and he takes the helm at a time when the company benefits from an upgrade cycle but has not made the strides in artificial intelligence (AI) that many of its competitors have.
Given these struggles, should investors buy Apple as it benefits from holiday-related sales, or stand pat for now?
Apple is in its transition phase
Indeed, buying now means investors are taking a chance on the company just a few weeks into a new CEO's tenure. Although leadership runs such as Satya Nadella at Microsoft or Lip-Bu Tan at Intel have proven profitable for investors, CEO tenures often result in investor losses.
It is too early to tell how Ternus will do in the job. What we know is that he has taken a more hands-on role with Apple design. To make time for that involvement, he has delegated financial and supply chain responsibilities to other executives.
Considering Ternus's hardware engineering background, this move may make sense. While Cook was still CEO, Apple's AI is such that it chose Alphabet's Google Gemini to become the core of Apple's next-generation Foundation model and enlisted it in helping to improve Siri.
Moneyball Superscore
Improved AI, no matter where it is from, and a recent upgrade cycle may be causes for optimism. After multiple quarters of sluggish growth, the $364 billion in net sales for the first three quarters of fiscal 2026 (ended June 27) increased by 16% compared to the same period in fiscal 2025.
Looking ahead, analysts believe Apple will finish the current fiscal year with 15% annual net sales growth, then slow to 11% in fiscal 2027. That includes an 8% growth forecast for the upcoming holiday quarter. That is still well above the 6% net sales increase in fiscal 2025, but the slowdown could be evidence that the upgrade cycle is starting to run its course.
Averytin News Financial update.