Apple unveiled its new product lineup today (we're up to the 16 series on the iPhone now), which will be available for pre-order starting Friday. The shares, which often sell off after new product launches, actually closed the day fractionally higher.
Maybe it was the hearing aids? No joke; as part of its "AirPods" refresh--the first in three years--the company announced that AirPods Pro will now feature clinical-grade hearing aids. The FDA only two years ago loosened the rules to allow access to certain hearing aids over-the-counter, and this could potentially allow people to use insurance or flex account money to subsidize them--a huge potential market.
It's actually somewhat telling that the hearing-aid announcement--and the news that the new Watch will use "Breathing Disturbances" to help detect sleep apnea--grabbed more immediate attention than the unveiling of the so-called "AI" series of iPhones. But many of the new features that these phones can now power, like a souped-up Siri, new messaging prompts, and "Genmojis," won't be fully available until the iOS update is "dropped" next month.
Jonathan Chaplin at New Street wrote that the "iPhone 16 is unlikely to drive big upgrades." But he noted he'll be watching discount activity from the big three wireless carriers as a proxy for the weakness or strength of demand. One side note: Boost Mobile is offering mega incentives (like $1,000 off) to grow its nascent network, which Chaplin notes could help Apple but hurt Boost's owner EchoStar, whose shares closed down 3%.
Perhaps the biggest gainer, at least during the trading session, was chip designer Arm, which jumped 7% after the FT reported that Apple's new A18 chip, which was unveiled today, is based upon its architecture. Another reminder that "ho-hum" IPOs--which Arm had almost exactly one year ago today--can often deliver better longer-term returns.
But the biggest gainer after hours was Oracle. The shares are popping nearly 9% after revenues beat expectations, with "cloud infrastructure" revenues matching expectations, to investors' relief. Oracle also announced a big partnership with Amazon ("Oracle Database@AWS").
So is the AI trade over, or just going through a reset right now? "This business is just growing larger and larger and larger," CEO Ellison said on the earnings call. "There's no slowdown or shift coming," he added, saying the company is currently designing a data center so large it would be powered by three nuclear reactors.
And thus the vibe shift from last week's macro-and-AI-concerns selloff (recall Broadcom's guidance last Thursday, on top of Nvidia's results the week before), to this week's "hey, maybe we can have a soft landing AND a continued AI cycle!" But it's only Monday.
See you at 1 p.m...
Kelly
