The $3,000 Catalyst for Apple Stock.

Apple just announced their next iPhone event and this is pretty exciting because the rumors are that we're expected to hear about the foldable iPhone Ultra. Obviously, if we don't get a foldable phone, there'll be a little bit of disappointment. But a lot of people are really enthusiastic that the new CEO now that Tim Cook has had its his his farewell party, which by the way Steve Jobs' wife went to, which is kind of cool. I was like, "Oh man, that's that's cool." Like I I'm a big fan of that. Uh and you know, I'm a Apple user, but I'm also a Windows user, you know, right? I'm excited. I'm excited for this foldable phone idea because the rumor is that we might actually be able to get a creaseless foldable phone. Although it's expected to cost a whole lot more and they're expected to have a way less supply for this puppy. Uh at the same time, that could at least the thesis is ushering maybe better artificial intelligence on device for Apple. My opinion is it's still going to take a few years to really get edge AI to be great, but we're already seeing improvements. For example, you can now search for photos using text, which they announced like 2 years ago you'd be able to do that, but it's actually starting to work now. The AI summaries in email or text are actually useful. It's just taken 2 years to get some of this stuff. So, the use is coming for Apple AI and I think it's just going to kind of slowly keep getting better and better. But the big showstopper here is going to be this iPhone Ultra. Now, apparently the rumor is that the iPhone Ultra is going to have a 7.8-in screen when it's unfolded. So, uh I remember, you know, really back in middle school and high school when we measure diagonal line increases, you you get a much larger increase than just the difference in size of the diagonal. So, for example, this iPhone Pro Max uh, is 6.9 in diagonally for its actual screen. Uh, the iPhone Pro Ultra or iPhone Ultra, the folded one, is expected to be 7.8 in. So, what I did is I asked Claude to show me what that would look like given that the screen size would be about 28% larger via the quadratic equation. Here's what it would look like stacked on top of an iPhone 17 Pro Max. So, this is your iPhone 17 Pro Max. If you unfolded or just to kind of look at, I actually think it should probably look a little bit wider than this. You know, maybe it would look a little bit more like this. But, whatever, just to give you an idea of how much more real estate you'd actually be buying, that 28% screen area, it does give you more screen area, you know, that's maybe a finger and a half more of screen area over here and a little sliver on the sides or or just more on the sides, right? Uh, another way you could potentially look at this side by side is this, uh, in terms of a mock-up. And so, that now definitely looks like a much bigger phone than the iPhone Pro Max. The iPhone Pro Max is already big compared to the normal, like the OG iPhone 1. I got that right when it came out, uh, and then I got, you know, the iPhone 3G, which was the iPhone 2. I've been a big fan of kind of the ecosystem and seeing it all evolve. This is a big moment. The biggest component of this is that there are rumors that Chinese manufacturers have figured out how to make the crease on these phones crease-less when you open it all the way up. Cuz nobody really likes that crease that you can feel as you're, you know, I don't know, trying to use a stylus on some of the Samsung devices or use your finger to draw something or play a game or whatever. You don't really want that crease or show pictures or watch a video or whatever. But, take a look at this. According to a report by a Chinese publication called UDN, this is per CNET or via CNET, engineers have made breakthroughs in creating a crease free iPhone design for the iPhone fold. And the product cycle is now moved from experiment to pre mass production. The iPhone fold is expected to potentially cost $2,399, which is obviously much more than the iPhone Pro Max. I mean, you're almost paying, depending on what kind of hardware you put in it, but it's probably going to be about twice the price. Uh no crease is a hard feat. Creaseless comes at a cost. Blah blah blah blah. But here's what we hear from the latest roundup on the rumor mill. Uh we have the potential next iPhone release as early as September 26th. Uh we expect the iPhone fold to be somewhere between $2,000 to $2,500. That site said $2,400. Uh you know, I I would expect it's going to be the 24 range. Uh except that'll be like the base entry uh storage side. Uh and then of course people will want to upgrade and realistically you could Apple might test a $3,000 foldable phone here with the largest kind of storage, which is wild to me, but it's going to happen. >> [laughter] >> Uh they'll they'll really be appealing to that premium market. The uh event is going to be September 9th. Uh that is Wednesday, September 9th. So, that's in a couple weeks here at 10:00 a.m. Pacific time. As usual, uh they get really anal about who's uh you know, re-streaming those events. They don't like that at all. So, we'll probably just cover the headlines using the Alpha wire that we have uh inside of the Meet Kevin app. Oh, I unplugged it. Anyway. Uh so, looking more at some of the updates that we have from CNET here. Uh the iPhones are expected to be around uh the foldable iPhones will be around 10 million units for production, which they expect will take about 3 to 5 months to ramp up. They argue that's going to be about 30 to 40% slower than the iPhone 17's production of 5 million units per month. This and so the 10 million initial run might end up creating a supply shortage was what they're arguing. I think that actually just reiterates how Tesla or not Tesla, I don't know why I'm thinking Tesla, how Apple is just going to end up pricing this even higher and they'll actually be able to sell it out because some people aren't going to care if it's $2,500 or it's $1,800, or $3,000 with the storage. They're they're just going to buy it. They're going to want it. You've also got this talk about them using liquid metal from a company called Liquid Metal Technologies for an alloy on the hinges that could help snap this screen into place to actually give that creaseless feel. I would argue that you know, the problem with the foldable phones now is when you fold them, a lot of them don't actually really lock into place on the out and that's why you end up having a crease because that that tension of the crease kind of pulls the sides of the phone up. If you really lock it out and it's like a perfect pull tight, you should be able to pull that glass so tight that you don't have a crease. That's like there'll still be a crease and it just would be imperceptible. Hence creaseless. >> [laughter] >> So, I'm excited about it. Oh, I got the alpha Nope, still Okay, I don't know. I got the alpha wire up. I was just looking here. Anthropic has agreed to spend $45 billion to rent AI cloud computing power from Nscale. Man, Anthropic just spends, spends, spends. And Apple, that's another place where Apple could really double you, I think, is over time, especially with the new Mac mini releases, over time more and more people expect you could just run open weight models on Apple hardware. We were just talking about Dell and how open weight models are really a boon for companies that can sell products related to running hardware on prem or running AI on prem. Soon you'll be able to just run these open weight models on your phones. Who knows maybe Apple will even talk about that. That could be another big W for Apple. I do think that Apple right now has a lot of pricing in it. This is just the earnings call from Dell here where they touch on data protection and running some of this AI on prem. But I do think some of Apple's valuation right now is already pricing in enthusiasm for the foldable phone and for the new CEO, the transition, maybe they'll finally get to more of an AI push or whatever. As a result, I'm not as excited about the valuation of where Apple is right now, even though I'm really excited about the device itself. If this company were trading, you know, in the lower 200s again, oh, it'd be glorious to go pick up. But right now, little pricey where it is. It does set up for a potential disappointment at the event, even though I'm really excited about it. So, we'll see what ends up happening. I think there's always a risk that analysts will think, "Oh, that iPhone fold is too expensive. Nobody's going to buy it." And then of course everybody ends up using buy now pay later and a ton of people buy it and then people are like, "Oh, wow. Dang, Apple really does know how to make money." Their margins are just fantastic at Apple. So, you got to give them credit for that. Credit where credit is due. If we look at a valuation for Apple, I'll just do a quick look to see where they trade on a PEG basis and the growth that Wall Street has priced in right now. The growth Wall Street priced in is pricing in could be on the low side with the consideration of open weight models that you could run on edge compute on Apple devices. Right now analysts are pricing in $8.80 of earnings per share for the end of their fiscal year. After that, we're looking at growth of only 8.61% on EPS, 11.21% on EPS, 8.55 in 3 years, and 9.62 in 4 years. If I divide that by 4, analysts are only pricing in 9.5% earnings growth at Apple over the next 4 years on average. The stock right now is trading [music] for 35 times earnings. So, 35 times earnings divided by 9 and 1/2, this company's trading for about PEG right now. It's rich. There's definitely hope built into it. And I think some of that hope might be justified because if those growth rates can really grow beyond [music] just what Wall Street thinks right now, 9 and 1/2%, could end up being a fantastic company. All right, cool. So, that's the Why not advertise these [music] things that you told us here? I feel like nobody else knows about this. We'll We'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you. People look up to you. Kevin Paffrath here, financial analyst >> [music] >> and YouTuber, Meet Kevin. Always great to get your take.