Locator: 49893AAPL.
For the past year we've been talking about Apple's supercycle.
Finally: those who know, know -- we're at the beginning of Apple's supercycle.
Apple's 1Q26 was a stunning, blow-out quarter.
It was all about China:
AI prompt:
When in the past ninety days -- since December 1, 2025 -- did the China government okay Apple products?
Google Gemini:
Today, at a glance:
Apple (AAPL) AppEconomy:
- China
- new milestone, a new record: over 2.5 billion active devices; lots of eyeballs;
- gross profit margin: 48%, up 1pp y/y; not trivial;
- services revenue: almost 4x Mac; and, 4x iPad; trending toward 0.5xiPhone;
- Microsoft stumbles;
AI prompt: some say Apple has entered its long rumored Apple supercycle. Do you agree?
Google Gemini: long answer. Here's Gemini's conclusion:
Going forward:
- Tim Cook downplays chip shortage;
- Tim Cook says Apple won't raise prices on chip shortage;
- China tailwinds;
- AI partnership with Google;
- probably the most accessible chatbot out there;
- foldable phone likely;
- over 2.5 billion active devices.
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India
India hands Apple another gift:
In a significant 2026 budget move, the Indian government has relaxed tax rules for foreign companies, directly benefiting Apple by allowing it to fund, supply, and own manufacturing machinery for its local contractors (like Foxconn and Tata) without incurring "business connection" income tax risks. This enables faster, cost-efficient manufacturing expansion and supply chain diversification.
Key Details of the Decision:
- tax rule relaxation: India announced in the 2026-27 budget that, to promote local manufacturing, mere ownership of machinery by a foreign firm in a contract manufacturer's facility will not lead to tax liabilities.
- impact on Apple: previously, if Apple funded expensive machinery for its Indian contractors, it risked being taxed on that arrangement under Indian law. The relaxation eliminates this "deal-breaking" risk.
- expansion strategy: this change allows Apple to increase its manufacturing footprint within India with greater ease, complementing its goal to diversify manufacturing away from China.
- context: the decision follows intense lobbying by Apple to remove legal hurdles to expansion. The move is considered a major win for Apple, supporting its strategy to treat India as a critical, global manufacturing hub.
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JPM On Apple
The article is archived here. This article was published six days before earnings announced a stunning, blow-out, record-setting quarter.
Most important paragraphs:
The surge in Apple's valuation follows a year of meticulous strategic pivots aimed at reclaiming its dominance in the global smartphone market.
Leading the charge, JPMorgan analyst Samik Chatterjee adjusted the firm’s price target from $305 to $315, applying a 30x multiple to 2027 earnings estimates. The upgrade reflects a belief that Apple is entering a "key product cycle" that will likely extend into the next several years.
According to internal projections and supply chain data, Apple’s revenue for the quarter is expected to land between $138.4 billion and $139.8 billion—a staggering 10% to 12% increase year-over-year.
Actual results:
Continuing with the linked article:
The timeline leading to this momentum began in late 2025 with the release of the iPhone 17 series.
Unlike previous iterations, the iPhone 17 Pro and Pro Max featured a mandatory 12GB of RAM to support the local processing requirements of iOS 26.4.
This technical requirement effectively forced a "generational demand pull," as users on older devices found themselves unable to access the full suite of Apple Intelligence features, such as the new "Personal Context" autonomous assistant. Consequently, iPhone revenue is projected to reach $80.2 billion for the quarter, marking its strongest growth since the 2021 post-pandemic boom. [Actual: $85 billion.]
Market reaction has been overwhelmingly positive, with the broader indices often moving in lockstep with Apple’s pre-earnings fluctuations. Other major players have echoed JPMorgan’s optimism; Evercore ISI recently set a $330 target, while Wedbush Securities maintained a "Street-high" target of $350. The consensus among these stakeholders is that Apple’s 2.2 billion-device installed base has become the most valuable AI distribution channel in existence, bridging the gap between complex large language models and everyday consumer utility.
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Disclaimer
Briefly
Briefly:
I am inappropriately exuberant about the Bakken and I am often well out front of my headlights. I am often appropriately accused of hyperbole when it comes to the Bakken. I am inappropriately exuberant about the US economy and the US market. I am also inappropriately exuberant about all things Apple. See disclaimer. This is not an investment site. Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If something appears wrong, it probably is. Feel free to fact check everything. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. Reminder: I am inappropriately exuberant about the Bakken, US economy, and the US market. I am also inappropriately exuberant about all things Apple. And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia. Nvidia is a metonym for AI and/or the sixth industrial revolution. I am also inappropriately exuberant about all things Broadcom. Longer version here.
