Apple's valuation is in no way related to its services, or products. That ship has sailed a long time ago. "fair price discovery" is absolute bullshit and at this point, number goes up because number goes up.
At this point, I don't even know how I'd switch back to Android even if I wanted to (and I don't). Once they've got their claws in, they've got you—and you're happy about it.
No wonder their growth and expansion continues.
I'm about to buy Macbook Airs as gifts for my family.
Heck, I might even buy a Vision Pro when it comes out.
Apple is so good at its ecosystem thing. Luckily, I own AAPL.
That doesn't make these ideas good, but mobile apps are frequently a bad idea and everyone still makes one.
In the software side they're virtually untouchable. Apple abandoned their serious attempt at dethroning CUDA, and AMD has let their GPGPU ambitions fester into uselessness. Unless the entire hardware industry develops a more attractive (see: open source) GPGPU library, Nvidia could dominate the market with CUDA alone.
It feels like observations like this are made with a certain blindness to non-consumer industries. In robotics, you either buy Nvidia Orin hardware or you don't compete. For AI, you either buy Nvidia hardware or you don't use SOTA. For parallel rendering in wattage-constrained environments, Apple doesn't even show up on the chart. Their 200w desktop chips are still fending off 120w midrange Nvidia laptops from 2020. It really is that bad. Even good hardware manufacturers genuinely struggle to compete with Nvidia when all the winds blow in their favor.
I don't like the situation, but I've also been around long enough that I know proprietary APIs can and will dominate certain industries. It took decades for DirectX to be dethroned as the leading 3D raster graphics library, and even today it isn't technically fully replaced. And that's one of the easier ones.
You could easily argue that DirectX still hasn't been dethroned and that D3D12 has been leading the way in pretty much every case. The current Agility SDK has things that Vulkan and Metal could only dream of.
That being said, DirectX doesn't feel like the titan of the industry it once was. If you're shipping a multiplat title and intend to hit PC, PS5 and Xbox in one fell swoop, targeting Vulkan makes it a cinch. It wouldn't be as "native" as a DirectX-first title, but it does offer SPIR-V cross-compilation and a huge degree of control over how you present your program. It is not neccesarily easier to use, but I feel like I'm seeing it more now that game engines are supporting it. If Nintendo continues to develop their Vulkan drivers from what they were on the Switch, it's very likely that we will see a write-once-port-anywhere GPU API.
Oh, and there's Metal too. Sorry pal, nothing nice to say about you. Go home, tell dad to let Vulkan play with you in the GPU sandbox.
Another part of it is passive investing in indices and etfs cause money to flow disproportionality into the biggest stocks by market capitalization. This is a positive feedback cycle for the largest companies in the index.
These stocks may well go higher. But they are also at levels right now where you are unlikely to get a good return on them if you invest long term from here.
I would neither invest in them nor go short against them.
If you wish, it’s trivial to filter out the effect of buybacks. Look at market cap over time instead of price over time. Look at market cap divided by revenue over time, instead of market cap divided by share price over time.
Buybacks are not always the best use of capital, but with BRK as a key shareholder, you feel that it must make sense in their circumstance. The same money Apple invested in buybacks, its competitors have invested in dubious hiring sprees and unchecked R&D.
I wouldn’t add to my apple position, but I wouldn’t consider selling any time soon. The folks at BRK know better than me!
This then is amplified by passive investment. I think that’s what makes buybacks so effective.
I’m not saying anything about it making it harder to determine the intrinsic value of a stock, which I think is what you’re talking about.