CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
AAPL will start selling modified versions of the Apple Watch Series 9 and Ultra 2 that will remove the blood oxygen feature so that device sales can persist in the U.S. market. Although the removal of the sensor could make the device less attractive to some, it puts AAPL in compliance with a recent court ruling (pending appeal), alleviating a potential risk. Separately, AAPL’s biggest competitor, Samsung, officially announced its new popular Galaxy S24 line-up that looks to showcase greater on-device AI capabilities (e.g., real-time translation of calls/text messages, imperfect photo improvement, image and text search on the phone). We think this development could further motivate AAPL to unveil its own AI capabilities at its developer’s conference in June (both on-device and via iOS updates). Despite concerns about recent multiple expansion and lack of an articulated AI strategy, our view of FCF ($110B in FY 24), pipeline, margins expansion potential, and Services opportunities keep us engaged on the name.