Apple's Big Trigger: The AI Upgrade Cycle
Plus junior gold miners and a top-tier defense stock ...
In this weekend edition of Stock Picker’s Corner (SPC):
How iPhones are the “gateway” into AI for Apple Inc. AAPL 0.00%↑.
The sector to zero in on for the next round of gold profits.
And pairing “New School” and “Old School” investments for the New Cold War.
Apple Extends Lead in AI Race
Just a few months ago, investors were writing Apple’s epitaph.
Check out this Bloomberg headline from March:
But after Apple positioned itself as an AI leader at its Worldwide Developer’s Conference (WWDC) in June, check out the tone shift: Same news organization … same company:
Apple went from an AI laggard to an AI leader, something David Zeiler, an expert on the Cupertino company who once interviewed co-founder Steve Wozniak, predicted ahead of the WWDC event in his May 29 interview with Chief Stock Picker Bill Patalon.
That newly upbeat perception ignited a spark for Apple shares, with the stock price jumping 16% since the event.
Now there’s a new “AI trigger” about to be pulled - the iPhone 16 launch.
The iPhone 16 will offer a new suite of AI capabilities (Apple calls this Apple Intelligence), including enhanced photo and video tools.
It’ll also transform Siri into a truer “virtual assistant” — capable of hundreds of new actions.
“You can ask ‘When is Mom’s flight landing?’ and Siri will find the flight details and cross-reference them with real-time flight tracking to give an arrival time,” Apple said in June.
Wedbush Securities analyst Dan Ives believes such features will spark an “AI-driven upgrade cycle,” since 300 million iPhones users worldwide have iPhones that are at least four years old.
General market expectations are 80 to 84 million initial iPhone 16 shipments, while Ives is more bullish, believing they will be at or surpass 90 million.
“There’s no doubt that Apple Intelligence will boost AAPL stock,” Dave says.
But as a fellow Wealth Builder, he favors putting time on your side and letting all of Apple’s potential innovations come to life rather than trying to time the “perfect trade.”
“Those gains will be spread out over several years, and some of it is already priced in. This will be a multi-year catalyst for Apple stock. And it doesn’t factor in any other Apple innovations or products we may see over the next few years, such as a cheaper version of the Vision Pro or an Apple Watch that can measure blood glucose levels without penetrating the skin. Never underestimate Apple.”
We shared Dave’s report on Wednesday. But if you missed it, you can see all of his first-rate insights by clicking on the link below.
🟡Where to Find the Next Round of Gold Profits
Between gold and silver, more of our focus at SPC is on silver investing.
That’s why we regularly feature the insider intel of Peter Krauth (publisher of the Silver Stock Investor and author of The Great Silver Bull) in various free and SPC Premium issues.
As Peter shows in his book, silver tends to outperform gold in bull markets:
But we don’t ignore the “yellow metal” as an asset for Wealth Builders; it’s already set several new all-time highs in 2024, and even Peter believes we’ll see peak gold prices of $5,000 — about double its trading price today.
That’s why Bill will be introducing a new expert to the SPC community — a gold expert who can tell us “what comes next.”
His name is Jeff Clark, a globally recognized authority on precious metals and the founder of TheGoldAdvisor.com. He also serves on the advisory board of the bullion storage facility Strategic Wealth Preservation in Grand Cayman.
Bill will be interviewing both Jeff and Peter for a roundtable discussion about precious metals in September.
In the meantime, we wanted to share one of Jeff’s recent reports from his newsletter, Paydirt Prospector, where he spotlights the biggest beneficiaries of rising gold prices: Junior miners.
“It isn't the soaring gold price that has lit the fuse to when money starts flowing into the junior stocks. Nor is it the Fed cutting rates. Not even a recession, stock market decline, or monetary easing. Those things will all come, but the fuse has been lit by another factor, based on a table you gotta see,” Jeff says.
You can see the table Jeff’s referring to, as well as the rest of his report on junior mining stocks, here.
☑️The Shortlist for Best New Cold War Stocks
As we see escalating plot developments in the New Cold War, Bill shared one of the top defense stocks to consider: Palantir Technologies Inc. PLTR 1.34%↑.
It’s the type of “new” defense firm built to handle the novel advancement of weaponry that includes drones, autonomous vehicles, advanced satellites, artificial intelligence (AI) and cybersecurity.
But that also doesn’t mean a company with origins dating back to the early 1900s can’t keep up with the modern times …
A company like Lockheed Martin Corp. LMT 0.00%↑.
For its just-reported second quarter, Lockheed reported a surge in net sales of 9% to $18.1 billion. Net earnings came in at $1.6 billion, or $6.85 a share, up from profits of $1.7 billion, or $6.63 a share, last year.
It boosted its full-year guidance on revenue (to a range of $70.5 billion to $71.5 billion from its April forecast of $68.5 billion to $70 billion) and earnings per share (to a range of $26.10 to $26.60 from the April projection of $25.65 to $26.35).
Lockheed achieved what Bill has nicknamed the earnings report trifecta: It beat on revenue and profits – and boosted its guidance.
Plus, it has a $12.60 dividend to boot.
In case you missed it, Bill outlined all the reasons to like Lockheed in the link below.
And make sure to check your inbox on Monday, as we’ll have a premier on the emerging opportunities in lithium stocks.
Take care,