As Tim Cook dinner Steps Apart, What is Subsequent for Apple?

This podcast used to be recorded on April 21, 2026.

Tyler Crowe: Apple is set to get new management. That is Motley Idiot Cash. Welcome to Motley Idiot Cash. I am Tyler Crowe, and nowadays I am joined by means of longtime Idiot individuals Matt Frankel and Lou Whiteman. Now we have been inquiring for questions from listeners all alongside. First, because of everybody who is been sitting. We find it irresistible, and we are getting a ton of them. We are going to in fact take on a few mailbag questions nowadays associated with the SpaceX IPO and our ideas on AST SpaceMobile.

However first, we need to speak about the massive information that got here out the day gone by, and that Tim Cook dinner is stepping down. The day before today, Apple introduced a transition plan the place Cook dinner will turn into the manager chairman of Apple, and John Ternus, who used to be the top of engineering for {hardware}, will take over for the CEO function beginning in September. Now, I am not going to mention this got here totally all of the sudden. Cook dinner were the CEO for with regards to 16 years, and he used to be in working roles on the corporate because the dotcom days. There have been some bread crumbs that Ternus will be the subsequent in line. For an organization that turns out like a rock of balance, it had somewhat a couple of retirements and transitions within the C suite over the last 12 months, and no more than a month in the past, there used to be a protracted Bloomberg article revealed that used to be speaking about Ternus being the inheritor obvious. Now, we aren’t eulogizing Cook dinner right here, however as we take into consideration Apple beneath Tim Cook dinner’s management, what do you notice as his lasting legacy, Lou?

Lou Whiteman: Balance. He saved the airplane on track. Easy as that.

Matt Frankel: Apart from the inventory value efficiency, which I am certain we will discuss extra in slightly bit, he had some lovely respectable achievements, and I feel he’s going to be remembered as a extremely efficient CEO. Simply having a look at what he completed. Apple’s income are up about 700% since he took over. He is recognized for balance, like Lou mentioned. He took the present merchandise, the iPhone, the iPad that had been successes prior to he took over, and they are nonetheless a hit. But in addition, he made Apple into the main wearables Sensible wearables corporate with the Apple Watch and AirPods that introduced beneath his watch. They are now not simply hand held electronics anymore, however I feel probably the most vital a part of his legacy is the expansion of Apple’s carrier industry, which is now probably the most successful a part of the corporate.

Beneath Cook dinner’s management, Apple constructed some extremely a hit subscription merchandise. They had been nonetheless on iTunes, like pay-for-a-song industry style when he took over, and he led the Apple Song factor, as an example. Apple now has greater than 1 billion paid subscriptions all the way through its ecosystem. Provider profit used to be about 5% of the industry when Cook dinner took over. It is greater than 25% nowadays. It isn’t all certain. He has the legacy of being in the back of the curve of AI innovation. That is, in my thoughts, one of the crucial greatest demanding situations for brand spanking new management. However in all, I feel he used to be an overly efficient CEO.

Tyler Crowe: On that income going up factor, since Tim Cook dinner took over, it used to be September of 2011, stocks of Apple on a complete go back foundation has generated about 3,100% returns for traders, in comparison to 731% for the S&P 500 on a complete go back foundation. Completely talking, Cook dinner’s tenure has been a powerful luck for any individual invested within the corporate. Something we will say about Apple beneath Cook dinner, it is been an excellent operator. That is not truly unexpected. He got here from the operations aspect. Do you take into consideration provide chain control, as Lou, you mentioned, preserving the issues secure, preserving the trains operating on time has been truly Cook dinner’s most powerful swimsuit.

However I feel if there used to be a gentle critique, and I do know, Matt, you highlighted the wearables and the carrier profit and stuff like that, I’d say the critique that a large number of folks have had of Apple over time, regardless of all the luck. Now not everybody can also be satisfied, proper? There used to be this delicate grumbling that, a few of its newer trends and development had been like incremental features as an alternative of, like, those innovative merchandise like we had with the iPhone and the iPhone used to be by means of all accounts, a powerful luck that reworked the way in which we take into consideration, cell, the whole lot like that. A part of that is assuming that once we’re bringing in a {hardware}, an engineering man, any individual truly deep within the design, bringing new merchandise to the fore, is that this an indication the place you guys suppose Apple goes to be going with Ternus right here?

Lou Whiteman: I feel the markets are hoping so. Glance, that is what Steve Jobs taught us to be expecting that yet another factor. That used to be all people, the legacy of Apple used to be. They do those nice shows. They inform you what you know, after which marvel you or wow you with some innovation. That has been lacking from the industry for the decade plus. Other people have checked out whether or not it is the automobile or whether or not it is, you realize, all issues. Apple TV, Apple automobile, all of those nice innovations and all of those superb tales we now have instructed ourselves in our head of the way they had been simply going to do for another product, what they already had carried out with the iPhone.

They have not carried out that, and sure, in idea, bringing in a {hardware} man may trade this, however let’s be truthful. Ternus has been the president of {hardware} for 5 years. To indicate that he used to be sitting on some new innovation, some new wow, some new product class this is simply going to blow us away, that means both he used to be sabotaging Tim Cook dinner or Tim Cook dinner used to be preserving Ternus and his crew from rolling the brand new stuff out. I do not believe that is the case. I do not believe traders will have to get their hopes up that simply because there is a {hardware} particular person in rate, that there is going to be a brand new iPhone or a brand new class killer, I feel the ones are truly, truly exhausting and possibly again to Matt services and products, we will have to settle for Apple for what it’s and now not truly get our hopes up that there’s some nice subsequent large factor proper across the nook.

Matt Frankel: Initially, I am satisfied Apple ended up now not looking to construct its personal automobile. I feel that may have ended up being a misstep in the event that they truly leaned into that. Bear in mind they had been meant to release their very own Sensible TV, too. That used to be some other large rumor that by no means ended up panning out. I truly see the AI catch up as the largest alternative/Problem for brand spanking new control. I agree that some other blockbuster product would unquestionably be a needle mover, however getting the AI technique proper may well be simply as large for iPhone and iPad gross sales. One just right factor, and this ties into Ternus’ {hardware} center of attention, is that Apple has targeted somewhat just a little of its efforts on on-device AI versus the pricey cloud infrastructure everybody else is making an investment in. This, specifically, may result in extra widespread upgrades in the event that they lean into that. If persons are upgrading their iPhones two times as speedy, that is simply as large as a brand new product release.

Lou Whiteman: On AI, it is humorous as a result of I do suppose they stubbed their toe. I do suppose they attempted to construct this style, and it did not it is giving them a move to mention, oh, Apple simply waits for people to determine, after which makes it higher. However I feel this works out really well for them. I have no idea if the worth is truly going to be within the style makers, and so their style failed. They’ve the client and Matt’s proper. To the level that they are able to determine to get AI onto the machine of shoppers, they’ll don’t have any downside discovering an AI that may spouse with them. They simply wish to determine the machine. Then, in truth, I feel having the client is extra treasured than having the style in two years.

Tyler Crowe: Now not for not anything, too, and we simply noticed this say throwing slightly additional curveball at Apple on the similar time right here. I have no idea for those who guys noticed this, however the Ecu Union put out some new laws announcing, principally, you’ll be able to’t have obsolescence with a large number of units, and principally you are going to need to have replaceable batteries in iPhones. I have no idea about you guys, however I have without a doubt needed to exchange iPhones once in a while as a result of battery substitute. Possibly just a bit additional curveball. I do not know the way a lot that is going to truly transfer the needle or trade the base line for Apple as a result of, glance, they will promote their merchandise just about anyway. However one thing like that, Ecu Union all the time appears to be including some additional laws to throw a wrench in issues. After the spoil, we’re going to get into the mailbag.

Good day, so only a fast reminder, as we mentioned, we are getting a ton of mailbag questions. Thanks for that, and we need to stay it going. When you have questions for us, please ship them into podcast at idiot.com, and we will check out to reply to them on air. You’ll ask maximum the rest associated with making an investment. All we do is ask you to stay it silly. Something I’ve discovered from studying everybody’s emails and questions thus far, attempt to stay it brief so we will in fact learn it on air. Now we have gotten some lovely lengthy ones. It is a little bit exhausting to control that into our time area.

I will ask a query right here. That is an e-mail from one among our readers, and it is encapsulation of about 4 or 5 emails that we now have gotten up to now couple of days. I assumed this used to be probably the most succinct person who lets do with it. This comes from Garrett Campbell. He requested, I heard that the S&P 500 is thinking about a rule trade to permit SpaceX to sign up for with out assembly the normal necessities for the index. I am not an expert at the IPO procedure and the way stocks turn into public, and who owns them. Are you able to speak about the professionals and cons with granting an exception and permitting SpaceX to sign up for the S&P 500 as soon as it is public? Thank you from Garrett. Simply to offer some context right here prior to you guys, resolution this query, the S&P 500 does not imply the five hundred greatest firms. There may be in fact some standards, and there is an index committee that selects them. It needs to be a C company. It needs to be sufficiently huge. It has to have sufficient liquidity, which that means there is sufficient stocks for folks to shop for, and it has to turn certain web source of revenue the usage of in most cases accredited accounting rules, what we name GAAP, in the newest quarter and cumulatively over the last 4.

Now, we do not know SpaceX’s financials at this time as it hasn’t filed the IPO prospectus, however with xAI and the X that was once Twitter, I feel everybody’s roughly assuming that it isn’t essentially GAAP successful nowadays. With that within the background and all that, Lou, why are such a lot of folks throwing a stink about this exception for the S&P 500?

Lou Whiteman: So, folks do not like rule adjustments, Tyler. Other people need you to apply the principles. Let’s be truthful, if the S&P 500 does this, it’ll be landmark. It is going to be one thing. NASDAQ, I feel, will waive its necessities and most probably probably the most different index merchandise, too. However the S&P 500 does not have a tendency to modify its regulations, and the principles say you need to public for a 12 months, that. However glance, there are obtrusive causes for SpaceX to wish this. Opening up the S&P 500 and the opposite indexes would create billions in compelled consumers to assist maintain the valuation, possibly even develop the valuation. I in fact suppose there is a respectable argument for why we will have to need this, too. I am getting the disadvantage, however the regulations round IPOs were not designed for $2 trillion firms. They had been designed for start-ups and small firms that needed to earn their means into the massive time. I feel I will be able to a minimum of make a case that now not having one of the crucial global’s greatest publicly traded firms within the index of huge publicly traded firms is flawed. Isn’t what we had been meant to look. If they do not waive the principles, I may argue, it makes the S&P 500 possibly much less reflective of the whole marketplace, and that is the reason now not what folks need.

Matt Frankel: To Lou’s level, if SpaceX had been to be added to the S&P 500 on day one, assuming that it holds that $2 trillion valuation, it might account for nearly 3% of the index’s weight all on its own. He is proper. It will make the index much less reflective of the whole marketplace. There are the reason why it mustn’t occur from day one as smartly, now not simply because it is the rule. For something, there is probably not sufficient inventory to industry to be had from the beginning. Tyler discussed that you need to have a definite degree of liquidity. SpaceX is speaking about elevating what 90-ish billion bucks? However the large index fund gamers must amass, and I am being conservative right here, a 20% plus stake if it had been incorporated within the S&P straight away. On the very least, I will be able to’t see SpaceX being allowed to be incorporated till a minimum of any lockup sessions, if there are any occur to be over.

Tyler Crowe: The $90-ish billion, I feel a large number of folks take into consideration that and so they listen, That is a ton of cash to lift. However if you find yourself having a look at a $2 trillion valuation, that is lower than 10% of all of the to be had proportion to be had on this corporate. By means of that definition of enough liquidity, sufficient waft, you begin to squint at that and be like, it is 90 billion, however it isn’t a large number of the waft of the corporate. Thus far, I feel this is the reason such a lot of folks suppose that is vital. Thirty p.c of all belongings beneath control within the best 100 ETFs available in the market nowadays are simply allotted to the S&P 500. By means of a ways and away, probably the most cash in ETFs is in S&P 500. If there used to be a race between the NASDAQ, the Dow, and the S&P 500, S&P 500 ran laps round everyone else. It is about $2.8 trillion in passive S&P 500 index ETFs on my own. We are speaking about a large number of portfolio shuffling if this occurs straight away, and if my reminiscence serves me accurately, Tesla, again when it used to be means, means larger than a large number of the firms within the S&P 500, it took them somewhat a couple of years to get into the S&P 500 for that very reason why that it wasn’t successful.

Lou Whiteman: I’m going to say this, Tyler, too. No matter we make a decision right here, we need to make a decision it speedy as a result of we’ve got Anthropic, possibly OpenAI ready within the wings. Once more, I do not believe the IPO regulations ever envision firms of this measurement going public. I feel we need to make a decision somehow how we are going to maintain this and let folks modify as a result of it’s going to ripple in the course of the markets, in the course of the index finances, and without a doubt have an effect on those shares as they arrive.

Tyler Crowe: We were given the ones two. We were given Databricks. We were given some area firms which can be coming public, and I will be able to virtually ensure they will be big enough to have S&P 500 issues. Talking of area, we are going to do some other mailbag query bobbing up after the spoil. As we discussed, we are going to get into the mailbag yet another time. Good day, in case you have questions once more, I need to remind everybody if you wish to ask, ship your emails to [email protected], and we will attempt to get them spoke back on air. Once more, that is [email protected].

This subsequent query is available in from Kalate Aahkola. Nice title, by means of the way in which, for making an investment podcast. He who’s surrounded by means of wealth. That is superior title on the subject of making an investment. I find it irresistible. This is the query is, I need to ask your opinion on AST SpaceMobile. The ticker is ASTS as a industry within the area trade. In keeping with Code, he says, their era seems to be awesome within the D2D area in comparison to SpaceX’s Starlink or Amazon‘s Low Earth Orbit. They have additionally partnered with a couple of MNOs, and industry seems just right on paper. Please proportion your truthful opinion in regards to the inventory and any attainable dangers making an investment. Thanks, Kalade.

I sought after to take on this query nowadays, in particular of all of the e-mail questions that we now have had as a result of AST Area used to be in fact within the information just lately as a result of Blue Starting place, they’d slightly ups, and so they put one among AST’s satellites into the flawed orbit the day gone by, and they are making an attempt to determine whether or not that in fact manner the rest. I will be truthful right here. I’m really not the gap man of the 3 people. I will stand again, and I will allow you to guys have the ground right here. Lou, whilst you see AST SpaceMobile in all of the area making an investment panorama, what are you seeing?

Lou Whiteman: Tyler, they mentioned they’ve to deorbit the satellite tv for pc. I need to sugarcoat it right here, however that is like when your folks mentioned your canine went to the farm. The satellite tv for pc isn’t of this global, sadly.

Tyler Crowe: No, that is what insurance coverage is for.

Lou Whiteman: Smartly, that is the excellent news for AST is that it’s insured and it’s not their fault, however this is a setback for a corporation making an attempt to do that 45 to 60 occasions this 12 months, so they are able to in fact delivery producing profit, which is vital for industry. Disregard income. The ones are nonetheless years off. This can be a corporate this is traded at a conservative 130 occasions long term gross sales. Once more, the ones long term gross sales are assuming that they get 45 launches up and they are able to in fact delivery producing profit. They do appear to have a product that works. I have no idea. I in finding it attention-grabbing that they’re technically awesome to StarLink or Amazon LEO. I do not believe we all know sufficient to understand. It is without a doubt slightly bit other. However my pushback there’s that this is a minimum of 3 competition, and there is extra in a marketplace that whilst it exists, is 2d absolute best. In case your mobile phone is lately getting a sign off of a tower, that is going to be the simpler option to do it. You could have a large number of firms chasing what’s an actual, however restricted marketplace at sky-high valuations and a ton of CAPEX and execution dangers. I feel there is a large number of reason why to be excited right here, however I feel that that is speculative at absolute best, and I’d warning any individual getting too out forward of themselves right here. There may be a large number of possibility right here, base line.

Matt Frankel: Like Lou mentioned, it isn’t an inexpensive inventory. You might be paying a few $31 billion marketplace cap for necessarily a pre-revenue corporate that has a complete of $1.2 billion of profit dedication, so far as I will be able to inform. They do some over 3 billion in money, so they’ve the cash to construct out what they are looking to do. It is a fascinating era. The marketplace alternative is there. It is estimated that about 4 billion of the folk on Earth are living someplace the place mobile protection isn’t nice. The place you’ll be able to’t simply get a sign from a tower all over the place you pass. There may be the chance. The corporate expects to have its satellite tv for pc constellation functionally in orbit by means of the top of the 12 months and to start out the wider industrial carrier after. There may be a large number of ifs there. There is a lot that is going to wish to pass proper. There may be that actual festival possibility from SpaceX. There are a large number of issues I’ve. If they are able to execute flawlessly and ship on their imaginative and prescient, sure, $31 billion for this industry may well be reasonable on reflection. However I do not see that as the bottom case situation.

Lou Whiteman: I have no idea what to make of that 4 to five billion particular person quantity, as a result of what number of of those that wouldn’t have get right of entry to at this time can have the funds for to hide AST or any individual else’s prices with this, which is truly the exhausting factor about that marketplace. This is the opposite factor that will get me. Say they get it proper. T-Cellular trades at what, 2.5 occasions gross sales. There’s a lengthy option to come down. Despite the fact that this works as deliberate, I have no idea if you’ll be able to justify even a fragment of the a couple of. I’m going to inform you, Tyler, if there is an making an investment takeaway from this incident, and we mentioned this at our member match in San Diego, there aren’t sufficient dependable release companions at this time. If you’ll be able to determine your self as an organization that may reliably get issues into area, you will prevail. Rocket Lab is booked up. SpaceX is sending its personal corporate up Starlink. I do not need to name Blue Starting place. Blue Starting place has a good monitor document, however there are a large number of firms which can be at the cusp of setting up themselves as dependable release suppliers. To the level they get there, that appears like a greater funding to me than ASTs is at this time.

Tyler Crowe: Complete disclosure on my private lifestyles. I have lived in some puts, we name them rising marketplaces, that I feel AST is announcing the place they do not have this cell protection while in create, I will be able to say, it isn’t nice, however it is very usable. I have been ready to do a far flung task from puts operating on a 3G dongle. It is very conceivable. Once more, the economics of it are slightly bit tougher than I feel they are announcing. However what I am listening to from either one of you is that you are lukewarm on AST SpaceMobile. Staying in that area making an investment house, we will do just a snappy best it. If any individual’s on the lookout for an funding in area, what’s your absolute best thought that you’ve at this time? Matt, you pass first.

Matt Frankel: So far as my absolute best thought in area, I’ve to move with Lou’s Rocket Lab, even if I do know I simply stole what he used to be going to mention. They are now not pre-very. As Lou mentioned, they are booked up. They’ve a perfect monitor document of turning in. They make an effort to get what they are doing proper. They are now not going to hit each milestone on their timetable, which they do not have to. They are doing a perfect task, and I feel that it is nonetheless a compelling long-term alternative.

Lou Whiteman: I’m going to pass with the theme that I simply gave right here. Once more, that is speculative. They are now not there but, however Firefly Aerospace, Ticker FLY, is starting to appear to be they are a competent release spouse. Once more, in the event that they get there, and I will be able to’t emphasize the INF, that is rocket science. That is exhausting. But when they are able to get there, there are going to be consumers like ASTs having a look to diversify, having a look to get issues into area. That is the place I am having a look and hope they get there as a result of all of those firms want it, now not simply my portfolio.

Tyler Crowe: Most definitely the one time on an making an investment podcast the place we get to mention, That is rocket science. As all the time, folks at the program can have hobby within the shares they discuss, and The Motley Idiot can have formal suggestions for or in opposition to, so do not purchase or promote shares based totally only on what you listen. All private finance content material follows Motley Idiot editorial requirements and isn’t licensed by means of advertisers. Ads are backed content material and equipped for informational functions most effective. See our complete promoting disclosure. Please take a look at our display subsequent. Due to our manufacturer, Dan Boyd, and the remainder of The Motley Idiot crew for Matt, Lou, and myself, thank you for listening, and we will chat once more quickly.