Apple's Stock Outlook: Analyzing Berkshire's Reduced Stake and Future Prospects

Apple: Berkshire Reducing Its Exposure Isn't A Reason To Turn Bearish (NASDAQ:AAPL)

Apple Intelligence and the upcoming upgrade cycle are expected to drive AAPL's market cap to surpass $4 trillion by 2025. I have been writing about Apple (NASDAQ:AAPL) since 2018, and no matter what the bear case was, AAPL continued to prove the bears wrong. Now, the latest highlight for the bears is that Berkshire Hathaway (BRK.B) reduced its position by -49.33% as it unloaded 389,368,450 shares. None of us are Warren Buffett, and just because he cashed in on some of the gains doesn't mean the bull thesis has stalled. There is nothing wrong with taking capital off the table, or exiting a position, but blindly making a decision because of what someone else did isn't a great way to conduct an investment strategy. I will discuss why BRK.B reducing its position in AAPL doesn't bother me and why I believe the iPhone upgrade cycle and other aspects will continue to support a bull cycle for AAPL. Jerome Powell just delivered the message everyone has been waiting for and stated that the time for rate cuts is upon us. I think some investors are overlooking why rate cuts will be positive for AAPL even though they are in a cash-rich position. I am still surprised by how many AAPL bears there are, and I feel that AAPL will continue to increase in number into 2025. Shares of AAPL are currently in a bullish trend as they are up 25.24% over the past year and 17.82% YTD. AAPL continues to be the most profitable company in the market, and anyone who has held AAPL over the past 5 years is up 347.77%. APPL is one of the few companies I plan on holding for decades to come and adding to the position when opportunities present themselves, as I believe it will continue to outperform the market going forward. Following up on my previous article about Apple I have been a shareholder of AAPL for quite some time and wrote my first article about AAPL back in 2018 (can be read here). Since then, I have written a bunch of articles about AAPL, and it's been a question of how bullish I was, as I have never written a neutral or bearish article about AAPL. Shares of AAPL have increased by 517.97% since my first article compared to the S&P 500 increasing by 139.66%. I wrote my last article on June 14th (can be read here), and since then, AAPL is up 6.07% compared to the S&P 500, climbing 3.88%. I am following up with a new article as there is a lot of news that makes me believe AAPL will continue going higher throughout the remainder of 2024 despite BRK.B reducing its position in half. I firmly believe AAPL can be a cornerstone to any portfolio the same way it is to many index funds, and AAPL is a name to hold and add rather than trade. Risks to my investment thesis in Apple Despite generating over $90 billion in net income on an annual basis since 2021, there are still risk factors to investing in AAPL. Enterprise applications or cloud computing has never been AAPL's forte, and they have been primarily a consumer-facing company, even though their products are utilized in businesses. Not diversifying into enterprise software could end up being a mistake as it is a way to diversify their revenue mix. AAPL faces competition in every business segment, from computers to smartphones to services. While AAPL has a gigantic install base in the billions, there is a chance growth will stall or decline if companies such as Alphabet (GOOGL) and Samsung create future products that are significantly more enticing from a technological standpoint. As revisions to jobs come in and more companies are set to conduct layoffs, AAPL may not benefit from an upgrade cycle the way some anticipate. AAPL is also in a delicate situation as their upgrade cycle depends on what Tim Cook showcases at the September 10th event. If AAPL doesn't impress its userbase or get the street excited, more investors could follow BRK.B and look for other investment opportunities. While I am bullish, investors should consider what could go wrong with the investment thesis for AAPL, as there is competition around every corner. I believe that the Fed will be more impactful to the investment case for AAPL than Berkshire reducing its AAPL exposure BRK.B made headlines after reducing its position in AAPL by almost -50% when the new filing was released. Its cash reserves increased to $276.94 billion at the end of Q2 from $188.99 billion at the end of Q1. Back at the annual meeting, Buffett answered some direct questions pertaining to AAPL and stated that he felt AAPL would still be the largest holding at the end of 2024. BRK.B has tremendous gains in AAPL, and there is nothing wrong with them taking some of their profits off the table. BRK.B still has 400 million shares of AAPL, which is worth $90.74 billion. BRK.B still owns more than 60 operating companies, including Benjamin Moore, Berkshire Hathaway Specialty Insurance, Duracell, GEICO, Dairy Queen, Fruit of the Loom, and See's Candies to name a few. I have no idea what Warren Buffett is going to do, but I don't think he is just going to sit in T-bills for the next several years. I believe that BRK.B is going to make an acquisition, and they are trimming AAPL to have a large war chest of cash after their acquisition spree is over. Even if BRK.B liquidated their entire AAPL position, I wouldn't consider that a bearish argument against AAPL, considering the fundamentals haven't changed. BRK.B has a long history of allocating cash toward acquisitions and buying assets from companies, just as they did when they purchased 7,700 miles of pipeline from Dominion (D) in 2020. My opinion is that the bears are trying to use BRK.B to fuel their bear case because, from a product and financial aspect, AAPL continues to prove them wrong. Jerome Powell just delivered a speech from Jackson Hole that was much-anticipated, as he signaled that the time to adjust rates is here. CME Group is projecting that the most likely scenario is that the Fed reduces rates by 100 bps by the end of the year. Their worst-case scenario is that 75 bps come off the current levels. I believe that this will be more impactful for AAPL than BRK.B, selling half its position for several reasons. As rates decline, so will the cost of capital, and businesses will be more likely to expand, as tapping the debt markets will make it easier to build into their profitability models. As this occurs, businesses will need more products and services to conduct business, and AAPL could see a boost in their iPhone, iPad, and Mac sales. As interest rates decline, so will the carrying costs on credit cards, and AAPL could see a boost on the consumer side as well. AAPL also has $86.2 billion in long-term debt on the balance sheet. At some point, AAPL will be able to refinance at lower interest rates. In 2021, AAPL paid $2.65 billion in interest expenses, which increased to $3.93 billion in the trailing twelve months (TTM). As rates come down, so should their interest expenses, as AAPL will be in a position to renegotiate terms or purchase more lucrative swaps against their debt. While a big deal is being made about the impact to small caps, the larger companies such as AAPL should also see a large direct and indirect benefit from rate cuts. I believe this upgrade cycle and the introduction of Apple Intelligence will provide the catalysts needed to surpass a $4 trillion market cap Once again, AAPL surpassed estimates in Q3 after generating $85.78 billion in revenue, which was a YoY growth rate of 4.9% and $1.42 billion more than the street expected. AAPL also produced $1.40 in GAAP EPS, which was $0.06 larger than expected. On the Q3 conference call, Luca Maestri (Apple CFO) indicated that they expect Q4 revenue to grow at a similar rate as their Q3 revenue on a YoY basis, which should put it in the neighborhood of $93 - $94 billion. This would put the 2024 fiscal year revenue at around $390 billion, which is an increase of about $6.79 billion YoY. It's always amazing to me when people turn bearish, as AAPL has an install base in the billions and a cult-like following with legions of people who consistently upgrade their hardware. It's hard to compete with a company that has $61.80 billion in cash on hand, $91.24 billion in long-term investments, and generates over $100 billion in FCF on an annualized basis. The September event should set the tone for AAPL, and I believe the bears underestimate how powerful Apple Intelligence will be. If you take the time to dissect what AAPL has created in its Services business, it's very hard to believe that Apple Intelligence won't be accreditive to its earnings potential. In the first 9 months of 2021, Services represented 17.75% of AAPL's total revenue after generating $50.15 billion. In 2024, Services increased the amount of revenue it generated over the first 9 months by $21.05 billion (41.97%) as it drove in $71.2 billion. This is 83.56% of the total revenue Services generated in 2023, representing 24.04% of their total revenue in the first 9 months compared to 17.75% back in 2021. AAPL has done a fantastic job building in a recurring revenue structure to augment physical hardware sales. Over the past 5 years, Services has an average annual growth rate of 16.62%. If Services only replicates its Q3 revenue in Q4, it will finish the year at $95.41 billion in revenue. There is a small chance that Services will become a $100 billion run rate business in the 2024 fiscal year, which would come ahead of my estimates for 2025. Whether it happens in 2024 or 2025, AAPL has built a recurring revenue stream that will reach $100 billion in less than a decade from scratch. I think that Apple Intelligence is going to be a game changer as it will merge AAPL's investments in AI and machine learning with its innovation across application software. AAPL has a chance to change how humans interact with technology, and based on what AAPL has done with the Services division, I believe they will create a free version and a tiered version to access different features through a subscription platform. It's going to be interesting to see the framework behind how this will work, but Apple Intelligence could be the next catalyst for Services and for the company. Apple Intelligence will be able to run on iPad and Macs that use M1 or higher chips and iPhone 15 Pro models and above. This should also create a large multi-year upgrade cycle on the hardware side and push Services revenue well past a $100 billion run-rate segment. The other aspect that people seem to overlook is how much cash AAPL returns to shareholders. In Q3, AAPL repurchased $26 billion of shares on the open market, which increased the amount of capital allocated to buybacks to $700.9 billion since 2012. Between dividends and buybacks, AAPL has returned $898.9 billion to shareholders since 2012 and is the most pro-shareholder company in the market. AAPL is likely to continue repurchasing shares, which will increase their EPS as their earrings will be distributed across a lower number of shares. Since the close of 2014, AAPL has repurchased 8.24 billion shares and reduced its share count by -35.11%. Bears talk about AAPL's low growth, but they often overlook the power of AAPL's profitability as they can continue manufacturing EPS increases each year just from the rate at which their repurchasing their shares. When I look at how AAPL is being valued on a price-to-FCF basis, it looks undervalued. I compared AAPL to the rest of the Magnificent Seven, The Coca-Cola Company (KO), Broadcom (AVGO), and Walmart (WMT). AAPL is trading at 33.05 times its FCF, and only Meta Platforms (META) trades at a lower valuation. Even at a $3.35 trillion market cap, AAPL would generate its entire market cap in 33.05 years, based on its current level of $104.34 billion in annualized FCF. I look at this metric because it's harder to be manipulated, and since AAPL buys back so much stock, its forward EPS can fluctuate quite a bit. AAPL is the only company exceeding $100 billion in FCF or coming close to this figure. This leaves AAPL with the ability to buy back shares, pay dividends, and allocate as much capital as needed to grow their business. AAPL has been criticized for their lack of innovation on the AI front, but AAPL isn't competing in the same space. AAPL isn't running a web service business, and their AI capabilities will be unleashed on the consumer front through their hardware products. I think the market will be shocked at how Apple Intelligence impacts the Services business and how AAPL will continue to utilize their FCF to benefit shareholders. Conclusion Shares of AAPL are at all-time highs, and I am not changing my stance on being very bullish about AAPL's future. AAPL is a stock that I want to own for decades to come and will continue to add when opportunities present themselves. I think people are putting too much emphasis on the fact that BRK.B reduced its position by half rather than looking at how AAPL is setting the stage for the future of their company. While past history isn't a blueprint for what will happen in the future, I believe it's more likely that AAPL will move higher with the market as it increases its earnings potential rather than sell off its share price. I think the upcoming upgrade cycle will last for several years and increase the growth rate on its Services segment. I think AAPL will reach $4 trillion in market cap sometime in 2025, and it has the potential to be the first $5 trillion market cap company. I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha Analyst's Disclosure: I/we have a beneficial long position in the shares of AAPL, AMZN, NVDA, GOOGL, META, TSLA, KO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader's particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. 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Is Apple Nearing Its Breaking Point? (NASDAQ:AAPL)

Apple's RSI at 65.20 suggests the stock is nearing overbought territory, with limited short-term upside potential toward the $236 target price, signaling possible corrections or consolidation before further growth. Since our last coverage, Apple (NASDAQ:AAPL) has delivered an impressive 8% return, moving closer to our previous year-end target price of $240. Warren Buffett's recent sale of nearly half of his Apple stake appears to be a strategic portfolio rebalancing rather than a signal of declining confidence in the company. This has likely tempered short-term price action, but Apple's robust institutional backing, strong financials, and solid product performance support its long-term growth potential, reducing concerns over Buffett's sale. Finally, Apple appears fairly valued at its current price, with strong institutional support and solid financials, though it is nearing overbought territory, suggesting limited short-term upside potential. AAPL stock is currently priced at $225. The stock's average price target for 2024 is $236, aligning with the 0.618 3-point Fibonacci retracement level, suggesting potential resistance at this level. The optimistic target of $253 aligns with the 1 Fibonacci level, while the pessimistic target of $217 correlates with the 0.382 level, which indicates potential support if the stock faces downward pressure. These levels are critical for traders monitoring retracements or extensions in price action, particularly in short-term trends projected across Fibonacci levels. Moreover, the RSI value of 65.20 suggests that the stock is nearing overbought territory, although the sideways trend with a downward reversion indicates weakening bullish momentum. The absence of bullish and bearish divergence further emphasizes that the RSI is not signaling any significant reversal or sell-off patterns. Still, the market may expect a minor correction as the RSI reverts towards the 50 level. Further, the Volume Price Trend (VPT) line, currently upward but reverting, suggests increased buying pressure, albeit with signs of slowing momentum. The VPT value of 1.05 billion against its moving average of 991.67 million indicates a bottom touchdown could serve as a potential support level. Finally, seasonality analysis for August 2024 over 43 years indicates a 61% probability of positive returns if an investment is made this month, making it an appealing entry point for those considering historical trends. However, September has historically been a weak month for AAPL returns, leading some investors to capitalize on any correction to maximize long-term gains. Berkshire Hathaway holds a massive portfolio position in Apple's stock. Buffett's investment philosophy focuses on long-term and value-oriented approaches that typically avoid high-tech companies. However, Buffett's investment in Apple has treated it like a consumer products company. Apple aligns with his long-standing preference for businesses with a loyal customer base and solid top-line. Interestingly, Berkshire Hathaway reduced its stake in Apple by 49% through selling 389.37 million shares during Q2 2024. Despite this significant reduction, Buffett's holding in Apple still represents 30.09% of his portfolio. Buffett focuses on maintaining 400 million shares identical to his long-term Coca-Cola holdings (a company he has held for decades). This investment strategy shift suggests Apple may remain a vital and prolonged part of Berkshire's portfolio strategy. Beyond Warren Buffett, Apple is heavily backed by the world's largest and most sharp institutions. The company's institutional holding structure points to its high perceived value and stability on the street. As of Q2 2024, the largest institutional shareholders include Vanguard and BlackRock. To begin with, Vanguard holds the largest stake in Apple, a portfolio allocation of 5.36% (1.32 billion shares) valued at $279 billion. It has made a modest increase of 6.11 million shares (+0.46%), which signals confidence in Apple's long-term prospects even at the all-time high. This slight increase reflects Vanguard's mark on Apple's sustained growth potential. With that, Apple is a cornerstone of Vanguard's portfolio at an average buy price of $28.84. Similarly, BlackRock (largest asset manager) holds 5.02% of its portfolio in Apple (1.05 billion shares) valued at $221.20 billion with an average buy price at $38.57. The addition of 9.69 million shares represents a more aggressive increase than Vanguard. The nearly 1% increase in holdings suggests that BlackRock still perceives Apple as a critical component of its investment strategy. Further, FMR has increased its holdings by 19.61% by adding 56.66 million shares, bringing its buying average to $57.54. This substantial increase signals that FMR anticipates high price returns from Apple. Other significant transactions were executed by Geode Capital (+5.65 million shares) and Morgan Stanley (+9.07 million shares) in Q2. Finally, Price T Rowe Associates also boosted its holding with a large increase of 21.52 million shares. The 10.4% growth in holdings indicates that Price T Rowe expects Apple to continue its upward trajectory. Norges Bank has chosen to invest a substantial portion of its portfolio in Apple right from the start. Norges Bank's new massive position of 177.53 million shares at $191.05 average price and JPMorgan Chase & Co's 15.85% increase (24.73 million shares) in holdings indicate a fresh wave of smart money in Apple's growth potential. In short, the total institutional activity reflects an increase of 35 million shares. Here, the number of hedge funds holding AAPL has increased to 803 in Q2 2024 against 710 in Q1. There were 233 new institutional holders in the AAPL during Q2. These ownership trends mark AAPL as a solid investment option. Buffett's move on AAPL can be considered an act of portfolio rebalancing instead of a systematic exit. This move by Warren Buffett is warranted to preserve the investment gains that were not progressive over the decade. Apple's EPS grew by double digits to $1.40, setting a record for the June quarter. This double-digit growth in EPS points to Apple's high profitability. The company's ability to attain record EPS in a single quarter, considering its size and during macroeconomic uncertainty, reflects its capacity to derive solid market value. Product Line Performance was solid beyond the 14% annual jump in services revenue. iPhone revenue was $39.3 billion, representing a slight decline of 1% year-over-year. However, on a constant currency basis, the iPhone segment showed growth. Moreover, Mac revenue increased by 2% to $7 billion due to the popularity of the M3-powered MacBook Air models. The back-to-school season and the increasing demand for computing devices among students and professionals have led to this growth. Moreover, iPad revenue surged by 24% year-over-year to $7.2 billion. The launch of the new iPad Air and iPad Pro models with M4 chips led to this jump. In short, new product launches rapidly benefit the company's top line, considering the upcoming iPhone 16 launch fiscal 2025 revenue may experience growth beyond analysts' estimates. Finally, Apple's financial stability and substantial cash reserves are significant strengths that support its growth potential. Apple's cash flow generation remains solid. The company generated $23 billion in operating cash flow during Q3 2024, which enabled Apple to return $24 billion to shareholders during the quarter, including $19 billion in share repurchases and $5 billion in dividends. As of the end of Q3 2024, Apple's cash reserves stood at $166 billion, providing the company significant financial flexibility. Apple's significant investments in AI and machine learning with the introduction of Apple Intelligence is a delay against the competitor's AI launches. However, the success of these AI initiatives is far from guaranteed. The tech industry is highly competitive with Apple's late entry into certain AI domains against rivals like Google and Microsoft, which may hinder its top-line growth and capability to dominate the AI market (due to the lack of first mover advantage). On the other hand, the launch of Apple Vision Pro (a high-end mixed reality device) represents a bold step into new product territory. However, the success of this product is still uncertain due to its premium pricing and the nascent state of the mixed reality market. The risk is that the initial excitement and interest may not translate into widespread adoption if competing products offer similar capabilities at lower prices. Additionally, the heavy reliance on developer support to create compelling apps for Vision Pro could be a bottleneck for the top-line. Finally, the blind following behind Warren Buffett may continue to misinterpret the sell action on Apple's stake as an inflection point for the stock. This may create short-term selling pressure on the stock. While Warren Buffett's reduction of his Apple stake may create short-term selling pressure, it appears to be a strategic portfolio rebalancing rather than a lack of confidence in the company. Apple's solid institutional backing, robust financials, and consistent product performance support its long-term growth potential. However, with the stock nearing overbought territory, further short-term upside may be limited.

Why I Believe Apple's Stock Deserves Substantial Upside (NASDAQ:AAPL)

I expect iPhone sales to rebound with the Fed's upcoming policy shift and the game-changing AI-powered iOS 18. Three months ago I shared my 'Strong Buy' recommendation regarding Apple (NASDAQ:AAPL). AAPL rallied by around 18% since May, significantly outperforming the S&P 500. Apple's brand and pricing powers are intact, and the company recently announced its game changing iOS18 with AI-features. Apple continues betting big on innovation by investing billions in R&D and investors will likely see several new promising product releases soon. Moreover, pivots in monetary policies of developed countries are approaching. Therefore, I believe that the iPhone sales growth is poised to rebound. Apple also continues enjoying strength of its ecosystem and intact brand power as Services revenues continue soaring. I still believe that AAPL is a "Strong Buy" and I am adding more shares to my position since my valuation analysis suggests there is a 30% upside potential. Apple is firmly committed to innovation. The company has spent $8 billion on R&D during the latest reportable quarter. R&D investments are paying off since there were a few crucial software releases since I wrote my previous article. The company unveiled an iOS 18 version with several AI-powered features in June during the WWDC 2024. The most crucial part is that the updated iOS will leverage generative AI capabilities, which means that criticism about Apple's presence in the AI revolution did not age well. At the same event Apple also unveiled software updates for the iPad, Mac, Watch, and VisionPro. Recent reports suggest that investors can expect more new products releases soon. According to Seeking Alpha, the company is working on a redesigned Mac mini which will be powered with a powerful M4 chip. Having this chip in its design means that the updated product will leverage AI capabilities, which aligns with the evolving technological landscape. The company also moves forward with a tabletop robot, and this device could come to market as soon as 2026. The uncertainty is high here, but at the same time the robotics market might be a new strong growth opportunity. According to the same source, the company also works on several other interesting products like "augmented reality glasses; smart glasses akin to Meta's (META) Ray-Ban glasses; a version of its popular AirPods headphones that have cameras; and a foldable iPad". The management also demonstrates commitment to maximize the potential of the Vision Pro headset. The product is now officially available in countries with large economies like China, Hong Kong, Japan and Singapore. Apple is also working on a lower cost version of Vision Pro. This one is expected to be presented in 2025. These developments are also positive as IDC forecasts strong growth in AR/VR headsets shipments over the next five years. Apple's Q3 2024 earnings release is another crucial development supporting my bullish stance. Revenue grew by 4.87% on a YoY basis, while the non-GAAP EPS grew from $1.26 to $1.40. The quarter was not flawless from the topline perspective since only Services and the iPad demonstrated strong YoY growth. There also was a modest YoY growth in Mac, but the contribution was insignificant in absolute terms. AAPL bears are likely to say that revenue dynamic is not so optimistic as the iPhone and Wearables sales continue stagnating. However, I am confident that headwinds for these categories are likely to be temporary due to the current unfavorable macroenvironment. While in the modern world having a smartphone is vital, upgrading from iPhone 14 to iPhone 15 is a discretionary spending since such a purchase can be easily postponed without losing the quality of life. As households across the developed world continue suffering from high interest rates, their discretionary spending deteriorates. Inflation fell below an important 3% psychological level in July, which is quite a good development that likely approaches positive shifts in monetary environment. The Fed still did not start cutting rates but the fact that inflation is now below 3% makes the start of interest rates cutting much closer anyway. The fact that the U.S. unemployment rate increased from 4.1% in June to 4.3% in July is also another solid reason for the Fed to start monetary policy easing due to its 'Dual Mandate'. The U.S. unemployment rate clearly demonstrates an uptrend, as shown below. That said, I expect the demand for Apple's products to rebound as monetary policies across developed economies will become less restrictive. Overall, I see no reason to become less bullish about AAPL. Headwinds for the iPhone revenue are temporary, and headwinds are highly likely to resolve soon. The company works on developing several promising products and I firmly believe that the WWDC2024 presentation was a game changing event in changing the market's perception of Apple's ability to drive AI revolution. The company's ecosystem and brand loyalty help rapidly expand the EPS even with some temporary challenges for the top-line, meaning that the company's moat is still intact. Apple is a unique company having no peers that boast the same level of the ecosystem of products and services. Therefore, it appears impossible to me to find a company to compare its valuation ratios with Apple's. Therefore, looking at how the company's P/E ratio is expected to move in the next few years will provide better understanding of the company's valuation. As outlined in the below screenshot, the P/E ratio is expected to decline notably within the next five years. This means that the current valuation is reasonable considering the EPS growth potential. The discounted cash flow ('DCF') analysis will help me in figuring out AAPL's fair share price. Future cash flows will be discounted using an 8.0% WACC. Since my previous thesis aged well, I reiterate a 6% constant growth rate for my DCF model. Bears will definitely challenge my 6% constant growth rate in comments, but I insist that this level is conservative for an unparalleled ecosystem like Apple. My analysis suggests that Apple delivered above 10% revenue CAGR over the last three decades. Moreover, the below compilation shows that Apple was not the only company that was able to sustain double digit revenue CAGR over the last three decades. With all my respect to companies like Oracle (ORCL) and Cisco (CSCO), their business models do not leverage a massive ecosystem that Apple has. That said, AAPL's revenue CAGR over the last three decades, along with the vast potential in AI after the iOS 18 release, makes me confident that a 6% constant growth rate is sound. When projecting a constant growth rate, we should also keep in mind that corporations have an option to grow via acquisitions. Of course, if companies were able to drive organic growth only, my forecasted constant growth rate would have been in line with average GDP growth rates. For example, Apple acquired 32 AI startups in 2023. These acquisitions helped Apple to incorporate AI capabilities into its iOS 18. To sum up, I believe that the ability of corporations to grow via M&A is a strong catalyst that helps companies in driving revenue growth beyond GDP growth levels. Relying on FY 2024-2025 revenue consensus is sound because the sample of around 40 Wall Street analysts is representative, in my opinion. For years beyond 2025 I use the same 6% CAGR, in line with the constant growth rate. I use a 22.3% TTM levered FCF margin for the base year, anticipating an annual increase of 50 basis points. My confidence in Apple's ability to improve its FCF margin is based on the company's historically strong operating leverage. My fair share price estimate is $294, 30% higher than the current share price. A 30% discount for a stock like Apple is a steal, in my opinion. There is a risk that my fundamental analysis might be missing something important because Warren Buffett's Berkshire Hathaway (BRK.B) has significantly trimmed its stake in Apple, according to the latest reports. Warren Buffett is considered to be the greatest investor of all times and all his moves are highly likely well-considered. The convergence between my opinion compared to Mr. Buffett's might mean that I have missed some fundamental flaws in my analysis. On the other hand, my bullishness about Apple has never let me down so far. According to the below breakdown of the company's revenue, China is the third largest market for Apple. As we can see in the breakdown, Chinese segment was the only one demonstrating revenue decline in FQ3. This is explained by geopolitical difficulties and intensifying competition in smartphones from Huawei. Apple even lost its top 5 spot in China recently. On the other hand, Apple is not ready to continue losing market share in this crucial market and has vast resources to sustain the fight. Moreover, the expected release of AI-powered iPhone 16 in September will likely help in improving Apple's competitive position against aggressive local players like Huawei. A stock like AAPL with a 30% discount is a no-brainer. I expect more promising new product releases and updates soon. The ease in monetary policies across North America and the Eurozone will also likely help to close the gap between the current share price and its fair value.