Closing Bell - Closing Bell: Apple’s WWDC Event Front and Center 6/5/23

Episode Date: June 5, 2023

Will today’s event keep the momentum going for Apple shares? That is the question shareholders care about most. Shareholders Brenda Vingiello, Nicole Webb from Wealth Enahncement Group and Malcolm Etheridge from CIC Wealth give their expert takes. Plus, Baker Avenue Wealth Management’s King Lip breaks down the headset battle between Apple and Meta. And, senior markets commentator Mike Santoli weighs in on what he’s watching in the week ahead. 

Welcome to Closing Bell. I'm Scott Wapner, live from Apple Park in Cupertino. This Make or Break Hour begins with breaking news from Apple's Worldwide Developers Conference. The company rolling out several new products today in that building right behind me, including Vision Pro, that much-hyped headset. Just as the stock today hits an all-time high, here is your scorecard, with 60 minutes to go in regulation. Dow's been red for most of the day. NASDAQ was not. But you see the major averages pretty much are all in the red. There's Apple, though. That is a considerable story today. That does take us to our talk of the tape. Will today's event here keep that momentum going for Apple shares and Apple shareholders? That is the question they

care about most. We do have a group of them with us today. A panel, Brenda Vangelo is here with me and Cupertino, Nicole Webb from Wealth Enhancement Group, and Malcolm Etheridge from CIC Wealth is also with us. We're going to start, though, with our go-to guy on Apple. You know him by now, for sure, Steve Kovach. He is here with me. Okay, so let's talk about this. There was that one more thing, right? The classic line. They actually said it. We were talking about that earlier. And then there was the delivery.

So what are we supposed to think now of Vision Pro? Yeah, exactly. So, Scott, going into this, we were talking earlier today. What is the message going to be? What is the pitch? It sounds like to me the pitch is this is a high-end entertainment device. Little bursts of gaming or sit back and relax and watch an immersive movie i even saw one demo they were giving in the presentation where it was a woman lying in bed

and looking at constellations in a constellation star chart app so it seems like they're really trying to make this more of a yeah like a luxury product i even saw someone on an airplane using it in one of the demos as well i I will note that Bob Iger from Disney came out and the biggest entertainment company in the world is deeply involved in this. Day one, Disney Plus is going to be on Vision Pro. I thought that was a really significant moment. And you saw Apple shares, obviously, they had a great day. Disney shares were negative. They moved positive on those. And I couldn't help but think how these two companies, Apple and Disney, when it comes to the way we consume entertainment content, are linked. And they have been linked. I thought of Pixar. I thought of Steve Jobs and Bob Iger from back then. And now you have Cook

and Iger coming together yet again. Yeah, exactly. And look, Disney has some of the hottest contents out there. I would also note sports are a part of what Disney is doing, too. I saw ESPN Monday Night Football on there, for example, and NBA, which is also part of the ABC network. So they have they're basically trying to put a lot of their IP and property on their Marvel Star Wars. This is all entertainment stuff. We're seeing less and less of the productivity slice of it. But then again, they did say, Scott, that it's going to run any iPad app. So if you have an iPad app that you enjoy using, I guess you can use it on your face now. So the big question, obviously, Steve, is going to be what's the consumer take up of this? That remains to be seen. No price yet,

which is significant. And we talked about this earlier, not the first mover, but trying to be the best mover. Right. In whatever product it rolls out. They've waited a long time for this, not since 2014 have they rolled out a product of this magnitude. And now we're going to see how it does in the market. Yeah, exactly. And look, they did take a slightly different approach. Maybe at first glance, it does look a lot like the meta headsets and other headsets we've seen.

But the one most compelling thing that they showed was when you put it on, you can see the eyes of the wearer. So there are actually cameras on the inside, a screen on the outside. And so our colleague Tyler Matheson was saying, well, how do you not feel like you're sequestered from the world when you're in this? It's going to have basically inside out, outside in view. So you can still interact with people and not be totally cut off from the world where you're in this, it's going to have basically inside out, outside in view, so you can still interact with people and not be totally cut off from the world. We should also mention, as we're looking at Apple shares here in the final hour of trade, after hitting that new all-time high, taking a little bit of a tick lower. Meta, by the way, Steve, was also lower on this announcement because now you got head-to-head. Really,

this is Tim Cook against Mark Zuckerberg for the way that we're going to exist and consume entertainment in the future. Yeah, it's setting up the next iPhone versus Android battle. And I'm sure Google is going to get into it and Samsung and who knows who else. We're going to see tons of these devices. But right now it's a meta versus Apple story. And yes, meta had the first mover advantage there. But it looks like Apple is saying, look, we got the premium content. We have Bob Iger on stage. And last week, there was a video game demo from Meta. It wasn't as impressive, I would say, as what we just saw here. And yeah, that's what we're seeing right now. Yeah, look what we're seeing right now as well at the bottom of the screen here. I'm not sure if you just noticed it. No, $3,499, $3,500. Okay. So we do have a price.

We were waiting for that. Now we have the detail. Early 2024 is when you're going to get availability of this product. $3,500. Your first reaction? Well, compare that to what Meta has. Their best headset is $1,000. This was expected.

We had heard anywhere from $2,000 to $4,000. $3,500 is not cheap. That's more expensive than the MacBook Air that they put out there that people are going to be using every day. This is not something you're going to be able to use all day, every day, like your phone, which costs $1,000, or your MacBook, which costs in the $1,000 range as well. So it's going to be a tough sell for a lot of people, and it's definitely going to be catered towards enthusiasts and people who want to try it out now and get ahead of things. You can bet, though, there will be cheaper versions of the future. And before I let you run, we didn't get much on AI today. No. So that was one of the big

questions going in is, what, if anything, would Tim Cook unveil about Apple's plans for AI into the future? And he left us with something big, but he didn't leave us with that. No, it was not. This was very much focused on AI today. I think the only thing that kind of even touches in that realm, there's a new keyboard feature for iOS 17 coming out later this year that uses the same transformer technology or similar technology as ChatGPT

to kind of predict maybe what you're going to type next. I know everyone could use a better predictive keyboard to get rid of those typos. So if that works, that just shows AI in a practical fashion, but it's definitely nothing like a chat GPT competitor. All right. So let's bring in our shareholder panel now to see what they think. Ultimately, that's what matters most now. Brenda Vangelo, shareholder of Apple. All right. So you've digested all of this. What do you think? Yeah, in our view, I think a big important part of the Apple story is enhancing products, making things easier. We heard a lot of those little tiny things that weren't a big sensationalized thing like the AR VR headset, but we did hear about a lot of little tiny tweaks

that'll make life easier for Apple product owners. And so I think that's an important part of the story is keeping people engaged, having some new features, even if they're not completely transformative, but things that make life easier while you're using their products, being able to sell more products to customers and hearing about enhancements of things like the watch, adding new features for things like cyclists, things like that, that might, you know, move somebody over the tipping point and saying, okay, I was thinking about the watch. Now maybe I'll get one because it has these extra features that really will help enhance my life in some way. I see a little bit of a sell on the news today.

That sometimes happens with events like this. Who knows why it's occurring. $3,500 is the price tag we have for Vision Pro. One of the questions we asked coming in, is an event like this capable of keeping the momentum going for a stock that's already up more than 40% year-to-date? How would you answer that? I think it's good to have a future growth driver. Even if we don't believe that the growth is going to happen right here and now, it's a product that they can enhance and iterate and eventually probably have more of a mass market

product. And for now, it can be an aspirational purchase. And in the meanwhile, we'll have a lot more content between now and then and usability for the product. So I think it's still good to have something to look forward to as a potential growth, new growth driver for the company, even if we're not expecting anything in the next 12 to 18 months. That's really going to be really material. You're doing anything with your with your shares. You took some profits in NVIDIA. We did. Now, NVIDIA is up like 170 percent here today. So Apple's not up quite that much, but at 30 times forward earnings and what you're witnessing here today, it hits this new high. Are you thinking at all about that? Yeah, I do think this multiple is getting pretty rich for the company because over the longer term,

the thing that we worry about is, you know, on Apple's last conference call, they talked about how there were 2 billion active devices being used worldwide. That's a lot. The biggest question is, that's great. You can do some cross-selling within that customer base, but how do you grow exponentially from there? They just already have so many products and are so penetrated. They can keep a replacement cycle going and sell a few new products here and there. But I think the bigger question is, how do you grow like you did over the last decade? I just don't think it's going to be possible. So in our

view, that probably means that it probably doesn't get a 30 multiple over the longer term. We probably see it settling in. And I do think with tech overall this year, that's been so fantastic. But I wouldn't be surprised to see a period where maybe things just go sideways for a while. And maybe there's catch up from some other sectors that really haven't participated in the rally that we've seen this year. Yeah, the rally, by the way, in Apple, as you see on your screen here, is dissipated. Stocks down more than 1%. We're at session lows for the market as well, certainly the Dow and the Nasdaq as a result of Apple's waiting there. Malcolm Etheridge, it brings me to you, where I just see that you sold half of your Apple position a week ago.

Is that correct? Yeah, I actually sold it, not related at all to the headset. I'll get into that in a second as much as you want to. But I actually sold Apple last week, along with Microsoft, half of my position in both of them because I had been adding to both of those positions all through last year, about a year and change ago since. And it had gotten so overweight. And I'm looking at how much the market has run up in the last, I don't know,

since March, basically, let's call it, in those tech names. And so it looked like a great point to be taking some profits to create liquidity, too, to be able to go after some other opportunities, because I do believe as hot as we've gotten in the last few months here, the market's going to have a cooling off period or at least an opportunity to go and buy back some of these shares at a much better price point. I think we're getting a little bit too far over our skis right now. So what's your first reaction then to what we've learned here at WWDC? And by the way, the story is more extensive than just the headset. That, of course, is going to suck the air out of the room and steal many of the headlines.

But Apple did announce a number of other products as well. Yeah, but we all were anticipating the headset, right? An upgrade to the iOS system, you know, great. An upgrade to the watch, great. But we always expect them to be upgrading and making those products better. But I will say specific to the headset, as a shareholder, these are the types of big swings

that I want to see a company like Apple making, right? For a company that's got more than $20 billion in cash sitting on their balance sheet, I want to see them taking big swings rather than resting on their laurels. I'm not sure it's this particular headset, at least not in its current form, right to the extent that Apple wants

where we're wearing this headset all day on top of our face to shop online and trade stocks and FaceTime and everything else, especially at a $3,500 price point without a phone carrier to subsidize the cost of it. But I could absolutely see where a Vision Pro 3 or 4 where the battery is actually attached to the device and it's as thin as the glasses I'm wearing on my face now, that's the stuff we expect

from an Apple. And so if they can provide an elegant solution like that, I can absolutely see this thing allowing them to succeed where so many other companies that have come before them have failed, much like Apple tends to do with all the other products that kind of break through. Yeah, Nicole Webb, your firm owns Apple. Your first takeaway from today is what? Yeah, you know, as an investor and as an advisor, I think what's most important here is just that forward look that it is known that humans like immersive experiences when it comes to technology and so to me this is a future solve for two imminent needs which is we see younger people just longing for immersive experiences but interfacing most commonly with technology platforms and then secondly the speed of business moves faster today

than it ever has before and we see that in the velocity of change in the market alone but we can think about that across multiple applications. And so if creating immersive technology and ways to interface where we feel like we are communicating and interacting with one another is possible, and this is the beginnings of that, I mean, that creates a framework that has multiple touches

across the investment universe. And so we have to remember that this came out at a developers conference today. And so we're just starting to speak to the community of people who will create the applications that help us achieve how we do business in the future. And that excites me. I think that is kind of the digitization or the revolutionary notion. And it's not us throwing around the metaverse and what it might be. It's this forethought on here's how we're likely to interact with each other. How do we think about investing towards that?

I think what's interesting too, Nicole, is that what you saw today is that Apple marches to its own beat. It's not swayed by what everybody else is doing or thinking. And there was anticipation and expectation. OK, what's Tim Cook going to say about AI and what Apple's future role in that is going to be? You really didn't get that today. You got this. This is what Apple wanted you to absorb today. And they'll do what they do in AI whenever they do it and whenever they

decide to tell us about it. As a shareholder, do you care? No. Quite frankly, to not talk about AI is to signal to all of us that it's not what we need to be talking about today. And so we've already baked in the trade, the application of AI. It's interesting, but it's not a solve for an immediate necessity, which is we see how people under 30 are utilizing technology. We see how that touches on education. Again, the speed at which we do business. AI is not an immediate solve for that. And so I do think this is really interesting to run alongside

the applications of AI. And so I appreciate them not attempting to intersect, but instead kind of reimagine that direct-to-consumer experience like they are with Disney to bring us kind of this ideation of what if we are attending sports? And that intersection, we've been talking a lot, Scott, about where does ESPN fit into Disney long term? And is it all just about bringing sports overseas? No, it's more than that. Again, it's back to this immersive experience. And obviously, you can tell I'm excited about this and the beginnings of what I believe is a runway to a lot of future applications. Yeah. Brenda, is it time, as we're talking about AI and what Apple didn't say today is it time to sort of step back in and really assess the mania

I think is a fair word around all of this and what all of these stocks have done I mentioned your Nvidia you know trimming it you mentioned that on halftime earlier today is it just time to reassess the entire space, what it's done to this point and what the hype is all about, what the total addressable market is truly going to be, and then how as investors we need to assess all of that? Yes, I mean, I think we've really been in the early stages, although as we've seen in history of going back to the dot-com age, that early stage can last longer than anybody thinks. But it is, I think with AI, it is, you know, there's so much potential there to be transformative. And that's what everybody is

excited about. But Scott, as you mentioned, we need to see, we need to better understand, like, how is this actually going to impact the earnings of companies? When you look to an NVIDIA, it's easy to see how it's impacting because they're feeling it already. And we're seeing it in the numbers. And of course, that's reflected in the valuation of the stock price. But when we look to the broader universe of tech stocks and even outside of tech where companies are starting to utilize AI, we just need to have, I think, a better understanding of what does this actually mean from a financial standpoint? It makes us more efficient, most likely. But what does that mean for our company's earnings? Malcolm, you know, it sounds to me as though you're preparing for a market pullback

of some magnitude. You've got some dry powder now. Maybe you'd like to see these stocks trade a little bit lower so you can get right back in. Although, as we've learned throughout history, trying to trade Apple, for example, hasn't always been a winning strategy for investors. That's absolutely true. I did expect, though, consensus around Apple's product launch was going to be a little bit muted. Sort of what we've seen since they've made the announcement. Right. And it came up with the price point. Their shares have traded down a little bit from that that high. And I thought that it was going to have a similar effect as it ultimately did, simply because Apple isn't talking about the thing that is the thing that's driving the markets right now. They didn't mention AI, just as you guys mentioned. They talked about what they wanted to talk about, which is a product that's not even going to be available for consumption until sometime in 2024, which doesn't really help to add to that hype and that excitement and that mystery that everybody is focused on when we think about AI. So I didn't expect it to have a similar reaction to the shares

of like an NVIDIA after they announced their earnings. I thought the market would kind of just give it a little bit of an even handed response, which is ultimately what we've seen so far. Maybe tomorrow will be different, but that's what we've seen. So, Nicole, give us our last word then on the market, whether you are as well expecting some kind of pullback. Remember, late last week, we had what felt like the finally getting a broadening out of this move. If that doesn't follow through and tech falters in any way, we have a little bit of a problem, don't we? Yeah. And I think there's two ways to look at the market right now. And the first is to say we're trading at 18 and a half times. That's on the higher edge. We have headwinds

in our face. We have a tight fed. We have tightening credit. Or my preferred kind of bull case scenario is if you strip out the mega tech names to your point, Scott, we're really trading around 15 times. And so if we can get that to 16 times, we're talking about a market that's at 4,700. And so we've bypassed the debt ceiling issues. We're seeing investment in China pick up in the form of stimulus, which we know has broad implications back in the industrial space. And then on top of it, you know, we're seeing numbers that are beating expectations

depending on how you want to dissect employment manufacturing. And so with all of that, I think what you can expect is, and what I'm hopeful for, is this continued broadening down in the market cap weightings and starting to see that pick up, you know, kind of pick up across the index as a whole. And so my expectations in the short term would be that we do continue this breakthrough momentum, but it's going to take a couple days to kind of shift through. All right. Yeah, we'll see how we settle out, too, with the Dow down 170. Nicole, thank you. Malcolm, of course, thank you as well. And, Brenda, it's been great having you here at Apple Park. It's Brenda Vangelo who's been with

us throughout the afternoon. Let's get to our Twitter question of the day. We want to know, after today's announcement, would you buy Apple stock even as it hit a new all-time high? You can head to at CNBC closing bell on Twitter to vote. We'll share those results coming up a little later on in the hour. In the meantime, let's get a check on some other top stocks to watch as we head into the close. Christina Partsenevelos, of course, is here with that. Christina. Let's start with blaming high valuations, tough competition in the beauty space and weakening spending habits for Oppenheimer's downgrade of Estee Lauder. The analyst downgraded the name to perform, citing concerns of a less robust travel retail rebound and more muted growth here in the United States.

Shares are 3.5% lower. Estee Lauder, though, I just want to point out, too, on a year-to-date basis, or even worse, down to, what, 27% compared to competitors Coty, 32% higher, complete opposite direction, and Elf Beauty, 89% higher. So definitely a discrepancy there. Let's switch over to another company now. Morgan Stanley, the latest firm to downgrade Dollar General after the discount retailer reported disappointing earnings and cut its full year outlook on Thursday of last week. You can see the drop in the stock right here on that day. Piper Sandler, Oppenheimer, Atlantic Equities as well, all downgraded this

name last week as well. That's why it's selling off four and a half percent. Keeps going lower, trading at 158. Scott. All right, Christina, thank you. Christina Partsenevelis. We're just getting started. Up next, what is next for tech? NASDAQ up more than 25 percent so far this year. Can the sector's run continue? And what might it mean for the broader market? Trivariates Adam Parker gives us his take after the break. We're live in Cupertino. You're watching Closing Bell on CNBC. Welcome back to Closing Bell,

live from Apple's Worldwide Developers Conference here at Apple Park in Cupertino, California. The Nasdaq still tracking for its best first half since 1991. Semis having their best ever, thanks to explosive gains in NVIDIA, excitement over AI driving that surge, as you know. Let's bring in now CNBC contributor Adam Parker of Trivariate Research. Adam, it's good to see you. Sorry you're not here with us, but it's great to have you on,

especially on a day like today. So let's talk tech, right? Because that's sort of what this whole day is about. Do you think the run in those stocks can continue? And if it doesn't, what does it mean for the broader market? Well, I think it comes down to, number one, how dovish the Fed turns out to be versus what's in the price. If I were, you know, making a guess, there'll be a more hawkish than what's in the price. So I think over the next six months, guess, they'll be more hawkish than what's in the price. So I think over the next six months, it will be a little bit harder for these big tech stocks to do well. The second biggest issue, which is not as big as the Fed, is the, you know, specter and

dream about AI's contribution. You know, obviously, you know, we've been writing for a long time about this and where it impacts things. So it's semiconductors first and other things later. So I think it's going to be a little bit harder for tech to do well. I think if the market works, it's going to have to broaden out a lot, get a China reopening, get a more cyclical recovery. It's going to have to come from somewhere else. I know you have your eyes on NVIDIA specifically. Remember, I say this every time,

but I'd just like to remind people that you used to be a chip analyst. I mean, you know the space better than most as somebody who talks about the broader markets on, you know, all the time. You think that stock can continue to outperform, though, for a bit, don't you? Yeah, look, all I'm trying to do is figure out where I can have relative upward revision. If you're an investor and the market backdrop is eroding, it's not exploding, but it's eroding, you want to try to own things where the estimates are more achievable than other places in the market. So AI exposed semis is one of them. I mean, we did a note yesterday, I think you saw it, Scott, where in the last 25 years, this is the biggest upward sales revision any larger mega-cap company has seen ever.

So, yeah, it's incredibly expensive on price to sales. Very infrequently, you get stocks this size more expensive, but you've never gotten a bigger upward revision. So if you're playing it for that, you got paid, and you got paid handsomely. So I think that's the key element to investing. Now, what history shows is when stocks get this expensive, they tend to start doing poorly six or nine months afterward. The problem is that history shows stocks as expensive only into the TMT bubble and into 2019. So I just don't have a rich history to evaluate it. I got to make a judgment call that the upward revisions are over if I want to start shorting NVIDIA. What about the way that we sort of ended

last week and the way we were thinking about the market saying, OK, maybe this is the moment where we actually broaden out. You have a huge rally into the weekend and it was about everything other than tech for a change as well. If that can't continue and today is one we're not going to use one day as judgment of whether that story is a story or not, but how much does the market need something else or a few other things to start playing ball? I think it does. And I think I'm more negative now on the consumer than I was at the beginning of the year. The discretionary stocks, you know, did quite well in the first quarter. But I'm looking now thinking, man, oh, man, I don't see how any of these retailers with

boxes can recover from all the shrink or so-called stealing. Their financing arms look like they have deteriorating conditions. And it's not just a one-off. It's not just in Chicago or whatever. It's in major cities across the country. And it's Target. It's Ulta. It's not just in Chicago or whatever. It's in major cities across the country. And it's Target. It's Ulta. It's Dollar Tree.

It's Dollar General. It's Walmart. It's Target. It's Amazon. I mean, so I'm worried about the consumer trend at the big stores and their ability to have profits be sustained. So I'm probably on the margin, you know, a little more negative now than I was a week ago. Which is so ironic as I sit in this chair across from Apple headquarters here where they just rolled out a $3,500 headset.

Right. When somebody like you is worried about the consumer, clearly there's a consumer category that they think they can continue to attract. I mean, the stock's worth $100 billion less than it was when I announced it, so we'll see. That's what happens when you're $2.8 trillion, I guess. Look, it looks like a rich price tag to me, but I'm wearing their $500 headset, so I'll prove that you can get over anything. I'm wearing it because the noise cancellation is amazing when I'm on an airplane,

and I don't want to hear any other noise. So, you know, once people find that it's light enough and it's valuable, as Malcolm just went through, I guess that and the price comes out. So I guess people will buy it. But that seems I remember when thirty five hundred was a decent car, Scott, and you and I are the same age. So, you know, it's a big price tag. Don't date yourself. Speaking of Malcolm, you know, the idea of 30 times forward earnings and saying, you know what, I'm going to take off half my position. You may have a bunch of investors who are thinking about those very questions at this particular time, whether it's Brenda, who was sitting next to me with NVIDIA, wanting to take some profits there, whether it's Malcolm talking about even a company like Apple on this big day taking off half of his position last week

to try and keep some dry powder in case the market does have a bit of a downdraft? I think it's hard, as you know, to call the market in like a one-month view. So I'm not trying to make that call. I'm just saying, you know, I'm trying to position how do I beat the S&P 500 long only? I've got to find chances where upper revisions come up. I don't know if these large cap tech companies are going to see big upper revisions from here. So I have to take a shot where I think estimates are low. Maybe it's health care, maybe it's energy, maybe it's metals, maybe it's somewhere, you know, maybe it's still some AI exposed semis, but I don't think I'm going to see big upward revisions unless I have, you know, a cost cutting story or something else to sink my teeth into.

All right. Adams, good to talk to you. We'll talk to you soon and I'll see you back on the East Coast sometime soon, I'm sure. All right. That's Adam Parker, Trivariate, joining us today. Coming up, a double dose of auto movers. We'll tell you what's driving Ford and Tesla higher today. Closing Bell, live from Cupertino. We'll be right back. About 25 minutes to go before the closing bell rings. Let's get back to Christina Parts of the Nevelos now for a look at the key stock she is watching. Christina. Thank you, Scott. Well, after a three-year pause, borrowers will need to resume student loan repayments this fall, and key bank analysts predict that could impact U.S. retail sales by 2% and have an outsized impact on Target's margins.

A retailer they say offered lukewarm guidance, which could signal further struggles. They downgraded the shares, and that's why it's selling off about 2.5%. In with the new, out with the old. Cybersecurity firm Palo Alto will be added to the S&P 500, and DISH Networks will head down to the S&P small-cap 600. This is big news for Palo Alto, be added to the S&P 500 and DISH Networks will head down to the S&P small cap 600. This is big news for Palo Alto, not only because it increases their visibility, but also all the money that is mandated to track the S&P 500 will now have to invest in track Palo Alto as well. The rebalancing event will happen on June 20th. Shares are up almost 5 percent. Scott.

All right, Christina, thank you. Christina Partsenevelos once again up next. Going head to head, Apple's new headset front and center in its big battle to take on Meta. We have an Apple and Meta shareholder standing by. Get his take, plus how he is trading this big event today. And if he thinks Apple has more room to run. Closing bell live from the Apple Worldwide Developer Conference here in Cupertino. Be right back. Apple's Worldwide Developers Conference wrapping up here in Cupertino. Just moments ago, the tech giant taking on the likes of Meta with the announcement of its first virtual headset, Vision Pro.

How will it match up? That's a big question. What will it mean for shareholders? Let's ask one. King Lip, Baker Avenue Wealth Management. He owns both Apple and Meta. It's good to see you. So what's your first reaction to what happened today here?

Well, I thought the expectations were high, you know, for today's update. And I think that's why the stock was up so nicely over the last two weeks. However, I didn't see any particular surprises from the conference, which is the reason why I think after the announcement of the Vision Pro share, Vision Pro device, the stock is down at the moment. So you don't see anything that happened today as a potential game changer for this company? No, not particularly. The reason why we say that is because

if you look at the Vision Pro device, from what we just learned, there's a lot of great technology that's been packed into that device. However, what's not as clear is whether this is really innovation for the masses. If I look at prior product launches, the AirPods or the iWatch, those were clear innovation for the masses where earnings growth and revenue soared on those devices. But with the device being priced at $3,500, as great as it is, I'm not certain that this is innovation for the masses, but rather more perhaps a novelty toy for the privileged. You say that Apple shares are fairly valued. I want you to tell me why you think that at 30 times forward earnings, why you think the way you

do about that stock? Yeah, you know, so we're long term shareholders of Apple. We think it's one of the best companies out there, one of the highest quality companies out there. We believe the shares are fairly valued at this moment in time. The reason why we say that is we don't think there's a lot of earnings growth this year. We're actually anticipated to see a negative earnings growth this year, about 2% or so. But there's other parts of the Apple business that continue to grow, that being the services business. It continues to be very attractive, where it requires a higher multiple, if you would. Relative to five-year to 10-year historical valuations, Apple is trading pretty

much in line with those historical averages. So we think the stock is neither cheap or particularly expensive at this point in time. It's interesting. I mean, some people are going to pick on what you said and say, well, you know, here we have somebody who owns the stock, doesn't have high expectations at all for earnings, and in effect thinks they're going to be somewhat disappointing in the earnings growth, at least what we've become accustomed to, but yet argues the shares are fairly valued rather than overvalued? How? Yeah, it's fairly valued at this point in time. However, looking out to, say, 2024 to 2025, that's where we think the earnings growth will resume. So this year, probably pretty modest

in terms of earnings growth. 2024 to 2025, we're looking at average annualized earnings growth of about 10%, which is actually above average of where Apple was at in the last couple of years. So we think this is sort of a ho-hum year where, you know, stocks up 40 percent with, you know, not not much earnings growth. We think that's the reason why shares are at this point in time fairly valued. I would argue at the beginning of the year when Apple was trading in the 120s, it was a undervalued stock at that time. Is tech fairly valued as a whole? And I ask because Apple, Microsoft, NVIDIA, Oracle, AMAT, Netflix, Marvell, Lam, AMD, Meta, those are your top tech holdings. So you've got a lot of exposure here. What about the space? Yeah, I would say at this time, the tech sector,

probably there's better opportunities to buy into the tech sector. I would say short term, perhaps a little extended. But keep in mind, you know, this recent earnings quarter that we had, the tech sector was actually one of the few sectors where we saw nice earnings growth, whereas the rest of these sectors in the S&P 500 were kind of modest. So I feel as if, you know, the higher multiples that we saw in the tech sector, especially given the AI push from a lot of these companies, it has been really a repricing of some of these shares from lower earnings expectations to much higher earnings expectations on the back of the AI growth. King, we'll leave it there. Appreciate your time very much. King Lip, Baker Avenue, joining us today. Last chance to weigh in on our Twitter question. We asked after today's announcements, would you buy Apple shares even as they hit new all time highs?

You can head to at CNBC closing bell on Twitter. The results are right after this break. Let's get the results of our Twitter question now. We asked, after today's announcements, would you buy Apple stock even as it hits a new high? The majority of you said, no, we would not. 55% as a matter of fact. And by the way, boy, do we have a big show coming up tomorrow on Closing Bell. It's all about AI. We'll talk about the investing landscape,

the opportunities, the risks, what it means for the markets. We'll hear from Altimeter's Brad Gerstner alongside the co-founder of DeepMind, a rare interview with Mustafa Suleiman. Can't wait for that. We've got the co-founder of Neva as well. A big show live from San Francisco tomorrow, 3 o'clock Eastern time. Up next, Binance under fire from the SEC.

It's dragging down crypto stocks today the details behind the backlash. Just ahead when we take you inside the market zone. We're now the closing bell market zone CNBC senior markets commentator Mike Santoli here to break down the crucial

moments of the trading day plus Christina parts another list back on the SEC's lawsuit against Binance. Phil LeBeau looking at two movers in the auto space. I'll begin, though, with Mike Santoli. All right, Mike, so we're in the red across the board. Maybe $3,500 too much for the market to bear for this headset today. Yeah, that element certainly didn't help.

I think we were also set up in Apple and in the Nasdaq in particular to have this little bit of a crescendo moment with the release, not just because of the price point or the specifics of the rollout, but more because the Nasdaq 100 was as overbought as it's been since the November 2021 peak. The overall S&P 500 threatening that 4,300 area, which really has been important in both directions for the last couple of years. And the high for the day was 4299.28. So clearly there was a lot of things pulling together that said maybe we're not just going to have an easy path to the upside, specifically with the profile of leadership that we've had.

We've definitely had a little bit of an aggressive chase in the call options the last two days, too. But you built up a cushion. We'll see if the market can just kind of cool off in a benign way from here. All right, Christina Partsenevalos, tell me more about the SEC's lawsuit in Binance today. Yeah, this is 13 charges from the SEC, to be precise, not only against the largest crypto exchange in the world, but Binance co-founder CZ, as he's known, and another company also controlled by him. So the U.S. regulators right now, they're alleging Binance co-founder CZ, as he's known, and another company also controlled by him. So the U.S. regulators right now, they're alleging Binance operated Binance.us as an illegal U.S. exchange. They sold unregistered securities and that Binance co-mingled billions of dollars worth of user funds and send them to another trading company controlled by CZ, the co-founder.

In a blog post about midday, Binance assured customers assets are safe and secure. And, quote, because Binance is not a U.S. exchange, the SEC's actions are limited in reach. That's according to them. So the SEC, we know, has been cracking down on crypto-related platforms, even issuing a warning of enforcement to Coinbase, what is it, two months ago? And that stock is just selling down dramatically, down 9%. Bitcoin down about 5.5%. MicroStrategy, which owns a lot of Bitcoin, also down. And that stock is just selling down dramatically, down 9 percent. Bitcoin down about five and a half percent.

MicroStrategy, which owns a lot of Bitcoin, also down. Riot down over 5 percent. And the list continues, Scott. Yeah, for certain. Christina, thanks. Mike Santoli, tough day for anything crypto related. So much for the crypto winter ending anytime soon. Yeah, the SEC, this SEC has been pretty unequivocal about this.

You know, the whole crypto industry seemed to operate on that old principle of, you know, it's better to ask for forgiveness than permission. They never got permission and they're not being forgiven for what the SEC says is essentially the sale of unregistered securities. It's probably a pretty expansive definition of that. The companies are going to fight it. But it does call into question just exactly what all the intermediaries were up to and whether they're just going to have to play defense for a while. I do think that Bitcoin and Ether prices probably surprised in terms of their resiliency. You know, after FTX ultimately did bottom out well above prior lows. So we'll see how this one plays out now. All right, Philip Oh,

tell me more. What's happening with Ford and Tesla today? Let's start first off with Ford. This is all about positive comments coming from Citi. Citi upgrading Ford to a buy rating from a hold rating. Three things that Citi likes about Ford shares at this level, or at least at the level just under $13. First of all, they're talking about the fact that these guys have strong truck and commercial franchises. That's well known. The other two were highlighted at Capital Markets Day, software and AI potential, as well as EV opportunities. And speaking of EVs, this is the other part of that city note. They are raising the price target for Tesla shares, going 175 up to 215. Not surprising given the fact that we have seen a number of analysts giving a little more positive commentary regarding

where Tesla is, though that market 215 is already below the current price at 217. Scott? Yeah, seriously, as we see those shares, Mike Santoli, gain on the day. What do you make of this story? Well, what's interesting is 215, that price target, is right at the level, the threshold that everybody's been watching for a while. It's been an area it hasn't been able to get above since late last year. It just did nose above that. You know, in terms of the overall story, I get the general bullishness toward longer-term appetite, not just for EVs, but for vehicles in general. Citi talking about how the number of cars per household looks like it's going to hold up or be a little stronger than anticipated right now. And I think opportunistically

on Ford, I mean, the stock, you could call it cheap all the way down, but it absolutely has continued to look that way if you don't really believe there's going to be a bad downturn in overall vehicle sales later this year. Yeah. Phil LeBeau, thank you very much for that report. And Mike, as we approach the two-minute warning here, I guess you have to wonder as to whether that broadening of the move in the market that we saw late last week was just a one-day phenomenon, two-day phenomenon, a bit of a head fake again? Sure. Now, you would never expect it to persist at that rate. Last Friday, you had small caps and banks and energy up 3% each on the day.

So clearly that's going to have to go in a more kind of sawtooth pattern from here. I still think that's the hope that you get at least a little bit of a re-rotation out of the few big winners and into the rest of the market. You do have more new 52-week highs than lows on the New York Stock Exchange today. Now, not a huge number. It's like 50 new highs, but it's still outpacing the lows. So I think repair takes a while. You know, I think you've, again, built up a cushion in the indexes. And, you know, maybe you're going to need to see a little more confirmation that we have that combination of the economy's holding up OK,

plus the Fed seems very clearly going to be pausing in a couple of weeks. But, you know, again, I don't think the baton doesn't always get passed without getting dropped from one leadership group to the next. Yeah. Yeah, I'm watching the Dow fall by near 200 points today. Apple hitting that all-time high, then falling back. And let's end where we began. And that's here at Apple Park in Cupertino, Mike.

And, you know, this idea, can you put into perspective what really what Apple has meant to this move in the market? It's better than 40 percent higher on the year as the biggest stock within the market. It's hard to overstate that importance and wondering what happens now if it falters a bit. Right, exactly. We're talking about 7.5 percent of the S&P 500 just about right now. Almost no mutual funds can, by their rules, own enough of it to mimic the index holding in that area. So I feel like Apple, for a while now, has kind of done its job in the index. It's the ultimate perceived safety play. They've reinforced their idea. They have confidence about the ecosystem. They take a very long-term approach.

I just don't see anything that went on today as a very fresh catalyst for why you would want to be paying up for it at this level. All right, good stuff, Mike. Thanks. I'll see you tomorrow. Dow's going to go out with a near 200-point loss. S&P Nasdaq also in the red as Apple falls from its all-time high.