VIDEO: Apple Underwhelms With iPhone 17 Event

In today’s Portfolio video, Chris Versace shares the Portfolio’s reaction to Apple’s APPL latest hardware event and why it was, in our view, largely a "meh" event.

He discusses the upcoming factors that will drive a more pronounced upgrade cycle for the iPhone maker, and why that fuels our rationale for continuing to own the shares. Chris also details what we’ll be looking for inside quarter results and guidance from Oracle ORCL on Tuesday afternoon, and previews Wednesday's August Producer Price Index report. 

Transcript

CHRIS VERSACE: Hey, everyone, Chris Versace here. It is Tuesday, September 9, and we're just coming off Apple's hardware event that on the one hand, largely as expected. Were their new iPhone models? Yes, there were. There was also a new iPhone Air, updated Apple Watch and Apple Watch Ultra models, and even some new AirPod Pros.

All told, however, incremental updates to existing products with some higher prices, largely again, as expected. Did we hear anything incremental on Apple Intelligence or the pending AI-enhanced Siri upgrade that's expected for the first half of next year? Not even a tease. So the answer would be, no.

So our takeaway from today's event is, it's another nice event, one that at the edges, will likely help spark some upgrades. But to us, the real upgrade cycle for the big Apple install base will happen when Apple Intelligence gets some teeth and the AI-enabled Siri is released, again, sometime in the first half of next year.

And let's remember, too, that next year, Apple is also expected to deliver its first foldable iPhone, and then follow along with not only other models, but also other foldable products in the ensuing years. To us, that totality of an upgrade cycle, that is their larger opportunity with Apple, and one that is likely to drive the higher margin, recurring revenue services businesses higher over time.

Now, we continue to the Apple story, but I think you can take a look, at least in the short term, if you look at the stock price this afternoon, the shares are trading off, kind of reinforcing our view that today's event was kind of, eh, if you want to sum it up in one word.

But let's look forward to this afternoon. We do have quarterly results from Oracle. We don't have Oracle shares in the portfolio, but following our recent capital spending comments from Meta and OpenAI, we will be looking to see if Oracle joins the list of companies that upsizes, potentially supersizes, its capital spending outlook over the next few years.

We'll also want to hear what Oracle has to say about AI adoption across its various reporting lines, as well. Now, that's this afternoon.

Tomorrow morning, we get the first of two back to back August inflation reports. Tomorrow at 8:30, we will see the August Producer Price index or PPI. Thursday, of course, brings the Consumer Price Index.

Now, we have been talking quite a bit about these reports, and I think it's fair to say that they are going to shape or reshape expectations for what the Fed could deliver next week. Now, earlier today, did we get revised job figures that show a weaker than previously expected jobs market? Yes, we did.

We talked about the revisions or the potential for those revisions early this morning, saying the expectation was around 900,000 jobs coming out of previous figures. Lo and behold, the figure was about 911,000. The way we look at it is, it kind of cut in half the average number of monthly jobs that were added for the 12 months that ended in March 2025.

Now, if you go one step further and you look at the table we shared yesterday with you in our note about the housing market and what we'll be paying attention to as we contemplate potentially making a move in that part of the economy at some point, you can see the slump in job creation even further in the month of June.

So that totality has kind of led the market to think that, boy, the Fed is definitely going to do something when it comes to interest rates next week, but also, later in the year. Our position has been that the size of whatever the Fed does, one, two, three rate cuts, it's going to be a balance between the employment numbers and the inflation reports.

That's why the inflation reports out tomorrow morning and Thursday morning are going to be important. The way we think about it is, once we have all of the data in hand, all the recent PMI data, the August employment report, ADP's numbers and even the inflation reports--

--that totality is going to allow us to have a better sense of what the Fed is likely to say, not only in terms of its policy decision next week, but also, how it's likely to update its set of economic projections. Or, as Powell refers to them all the time, the SEP.

Remember, these updated economic projections are going to show what the Fed now thinks the economy is poised to do in 2025, what the employment market is likely to do for the year, as well as where it sees the Fed funds rate at the end of the year.

It will have those same updated expectations for 2026 and 2027. So we'll get a bigger picture, as well as to where the Fed sees the economy over the ensuing quarters. That's also especially true for the Fed funds rate.

So a lot of that will be coming together. And let's remember, it's the confluence of the speed of the economy, the jobs market, and inflation pressures that will shape what the Fed has to say. Again, a lot more to say on this in the next couple days.

Now, as I touched on a minute ago, yesterday we looked at the housing market, and we are working on another potential interest rate play. I teased this a little bit. We're continuing to roll up our sleeves. We want to make sure we get it right.

So all I can say is, please stay tuned for that on the next day or so. Same thing goes for comments coming out of the Goldman Conference. On the one hand, we want to be mindful of what's said, but we also want to capture the flow through of not only that conference, but the other conferences that are going on.

For example, the Barclays Financial Services Conference that Bank of America spoke at yesterday, that conference is going on today and tomorrow, as well. What we want to do, is capture the full impact of that. Not only what the companies have to say, but also how Wall Street consensus expectations might shift as a result of these events.

That is why we'll start off early next week, Monday, with an updated table of consensus EPS expectations, and a few other things, for the portfolio. So you have that to look forward to, as well. As you can tell, we've got a lot more coming your way, both through the balance of this week and of course, into next week.

So please continue to check your emails, your alerts. We want to make sure that as things develop, you're getting our latest thoughts and insights. And if we make any moves with the portfolio, we want you right there with us. Thanks for watching.

At the time of publication, TheStreet Pro Portfolio was long APPL.