Apple Is Resilient, But Buybacks Are Diverting Capital From Its Moat (Upgrade)
Summary
- As a long-term Apple Inc. customer, I deeply understand its value proposition. However, management is facing moat degradation from AI disruption in hardware, posing price-return risk.
- Management would be wise to focus less on share buybacks at this point and more on plowing cash flow effectively into more aggressive M&A and better talent for R&D.
- I forecast that AAPL stock will achieve a 10% annual return over the next 12 months. I also forecast that Apple will achieve a 10% annual return over the next decade.
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