Missed 3 trillion Apples, and you still have Tesla

Author | Shen Peng

It's been 12 years since Jobs died.

In these 12 years, Apple has grown to become the world's largest and most profitable smartphone producer. Today, Apple's market value has more than 10 times, breaking through to $3 trillion, topping the world.

It was Apple's best times.

But at the same time, Apple's disruptive innovations have become less and less frequent, and now they almost cease to exist, and the innovation projects promoted by Jobs during his lifetime have basically disappeared. In recent years, the tinkering toothpaste innovation has also gradually weakened consumers' enthusiasm and expectations for Apple.

The metaverse, the smart cars in full swing, and the recent boom in generative AI, each wave has seen many tech giants participate in it, but Apple has not seen any substantive moves.

Up to now, every day after the release of Apple's new products, there are very few consumers queuing up at the experience store, and there are obviously not as many scalpers who fry new products as before.

Although Apple is still gradually rumoring a new market capitalization height, its growth pace seems to be gradually slowing down.

Will apples be a thing of the past?

01

Warren Buffett's bet

Lao Ba, who has always avoided investing in technology stocks, began to buy Apple in 2016 and bought more and more.

By the end of the third quarter, Apple had become his largest heavy stock, accounting for more than half of its market capitalization, reaching $157.24 billion.

It can be said that Lao Ba handed over half his life to Apple, and as long as Apple's stock price fluctuates sharply, the market value of Berkshire Hathaway's holdings will also fluctuate sharply.

In Q3 this year, Buffett suffered a huge loss of $12.77 billion, which was actually caused by the sharp drop in Apple's stock price.

Why do we have to mention 2016?

Because this is the waterpoint of the capital market's view of Apple's investment logic.

Warren Buffett is a very special person, he has stuck to his value investing theory all his life and has never changed.

Therefore, being favored and bought by Warren Buffett is a very landmark event.

He doesn't just buy tech growth stocks.

Therefore, in 2016, there was a big discussion in the capital market about whether Apple is still a technology growth stock.

If so, then is Buffett deadly?

If not, then how to explain that Apple's mobile phone sales are indeed still growing rapidly, and profits are constantly hitting new highs?

In 2016, Apple's annual revenue was $215.639 billion, net profit was $45.687 billion, and its market value was more than $500 billion, and in 2019, its annual revenue was $260.174 billion, with a net profit of $55.256 billion, and its market value exceeded $1 trillion for the first time.

In other words, Apple's revenue and net profit have only increased by more than 2% in three years, but its market value has doubled.

If you look at the performance alone, this growth rate is no longer a high-growth technology stock, but more like a consumer stock.

Before buying Apple, Warren Buffett said one thing, "When I saw that almost every one of my great-granddaughter and her friends had an iPhone, and they couldn't live without the iPhone, I realized that Apple's customers are very sticky, and Apple's own products are also very valuable." ”

It's clear that Buffett hasn't changed, he just sees Apple as a consumer stock with a very high moat.

Therefore, the conclusion has become obvious that since Warren Buffett bought Apple, Apple has not been a technology-based high-growth stock, but a consumer stock with a high moat.

02

Cook's dilemma

Since Steve Jobs' death, Apple's disruptive innovation has come to an abrupt halt.

The Apple TV and Apple Car promoted by Jobs when he was alive have not been heard from until now, which may be related to Cook.

Cook is definitely a successful businessman, but certainly not a successful innovator.

However, although Cook does not have the disruptive innovation ability of Jobs, it does not prevent Cook from pushing Apple's performance and stock price to the altar.

From 2011 to 2022, Apple's performance increased by 4 times and its market value increased by 10 times during the Cook era.

If you can do this from the perspective of doing business and investing alone, what more can you ask for?

Regardless of whether it has disruptive innovation or not, isn't the pursuit of innovation in business just to make money?

There is indeed nothing wrong with that.

However, Apple has also been questioned by a lot because of this. The most important point is that the whole company is lying on the credit book of Steve Jobs.

That's right, Jobs's legacy can allow Apple to lie down and win for 10 years, the question is, what will Apple rely on in the next decade?

Virtual Reality, Smart Vaporization, or AIGC?

Over the past decade, Cook has had countless opportunities to prove that he can lead Apple to new legends in terms of innovation.

But in the end, he did not achieve a height in making money that even Steve Jobs could do.

Almost none of these disruptive innovations actually came to fruition.

In 1985, Jobs publicly defected from PepsiCo's CEO Scully, and eventually Jobs was forced to leave Apple, which he founded.

After that, Apple became more and more mediocre, and the light was completely overshadowed by Microsoft, and it was not until the return of Steve Jobs in 1997 that it regained its glory.

In fact, Apple in Scully's era has been eating what Steve Jobs left behind, Scully may have done well, but he has always been a salesman, completely incompatible with disruptive innovation, otherwise, he would not have been forced to leave Apple in 1993.

History is always strikingly similar, and today's Cook is somewhat similar to the Apple of the past.

I just don't know, will it repeat the mistakes of the past, lose the disruptive innovation of Apple, and will it be so poor that there is only money left?

03

The new king of Silicon Valley

When it comes to innovation, Silicon Valley has no shortage of talent.

Steve Jobs is the most important representative of technological innovation in Silicon Valley since 2000, but with his death, it is also true that many of Apple's disruptive innovations came to an abrupt end.

Now, there are descendants who are trying to surpass him.

For example, Musk, and Ultraman.

These two people basically dominate the current global field of scientific and technological innovation.

Musk has made great achievements in electric vehicles, rockets, AI, communication networks, etc., while Ultraman is focused on AI.

Both have their own strengths, and it's hard to say who is better.

As an investor, though, you may be lucky because there will always be so many options for tech growth stocks.

If you think Apple is no longer a tech growth stock, then Tesla is at least one, as well as the unlisted open AI, and the electric car, autonomous driving, and generative AI concept companies derived from it.

The current Tesla FSD has evolved to the V12 version, and the word beta has been removed. Although Musk has been bragging and has been bouncing tickets, there is no doubt that FSD is getting closer and closer to commercialization.

Recently, Huawei's intelligent driving is also very impressive.

Intelligence may be late, but it will never be there.

There are many more AI applications, and the same is true.

Therefore, for many people, whether they need to give half their lives to Apple like Warren Buffett, the answer is obviously no. Because there are so many options nowadays, Apple may be a good company and still make a lot of money every year, but in the world of investment, it no longer belongs to the company that was full of imagination and infinite possibilities.

Once the imagination is missing, it is really not easy to get it back.

Of course, even if you give half your life to Apple, he won't do anything to you, just earn more and earn less, even if you lose, as long as you can afford to wait, you will come back.

Thankfully, we have a choice.

The same is true for companies such as Tesla and open AI, which are already strong enough to show their innovation.

04

epilogue

Chinese like to say that there are talented people in the rivers and mountains, and one generation is better than the next.

This is also very suitable for Silicon Valley across the ocean.

From the earliest HP founders Bill Hewlett and David Packard, to Intel's Gordon Moore, to Jobs, Gates, Larry Page, Sergey Brin, Zuckerberg, and now Musk and Ultraman.

It's endless.

You can not trust the United States, but you can definitely believe in its technological innovation and the investment opportunities that it creates. (End of full text)

PS: African swine fever, the de-production capacity cycle, and the advance of peak season demand, catalyzed by a series of factors, the pork cycle is approaching the bottom, and a new round of upward cycle is starting. How do you view the new round of pork cycle, and which target companies should we focus on?