In This Article:
Needham & Company senior media and internet analyst Laura Martin joins Market Domination to discuss Apple's position in generative artificial intelligence (AI).
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You should have a bio on this name when you're talking to clients and explaining why. What what's the thesis there, then?
Oh, well, uh-huh. So what's happening is, I think Wall Street loves the upside potential of earnings of generative AI, but as you know, we're in the investment cycle of the generative AI. We're building the large language model. So Amazon will spend $105 billion this year alone. So Google will spend $85 billion, and, um, uh, Meta will spend $60 billion. So you're in the investment cycle. If you think that gen AI is overhyped, or too early, or going to take longer than people think,
Apple is a wonderful place to hide. Their capex is at $12 billion, and hasn't moved in three years. So it's a really, and they're generating $90 billion of cash flow which they're using to buy in your shares, not invest in generative AI. So if you think that gen AI is overhyped, then Apple is a wonderful place to hide.
