Closing Bell - Closing Bell Overtime: Apple’s Tim Cook To Become Executive Chairman, John Ternus Incoming CEO 4/20/26

Episode Date: April 20, 2026

Apple said Tim Cook will become executive chairman and John Ternus will be the new CEO starting September 1. We have the first and instant reaction with analysts Gil Luria and Patrick Moorhead along with Deepwater Asset Management’s Gene Munster. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing end to the trading day at the NYSC. Cohen and Steers ringing the closing bell and at the NASAC, Blue Moon Medals, doing the honors. Welcome to closing bell. Over time, we're live from Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. All good things must come to an end, I guess. The NASAC's 13 session winning streak snapped down a third of a percent, smaller losses for the down of the S&P 500. The Russell in the green, though, more in the market straight ahead.

On our radar at the closed airline earnings coming at the same time deal drama surrounds the sector. Speaking of deals, Eli Lilly making a big buy. We'll have those details. And are the crooks staying one step ahead of the cops? A different kind of heist rocking the world of crypto. So kind of a gentle way for the streak to end, I would have to say, in terms of magnitude of decline. You're not seeing a ton of outright buyers' remorse from people who are gorging on the riskiest

stocks. That said, really, I think, benign digestion is what we're seeing today. And it's one of those things where, you know, markets mostly. represent a little bit of a bid that peak uncertainty is over. We're willing to take our chances that earnings are going to substantiate this move, and that has to be proven out. That's a very nice way, Mike, of saying that nothing much happened today. Nothing a lot happened. Reserve our gains. Volatility was up, notably, but it does feel sort of like a pause. I had a big information flow period. The VIX did tick higher. Sometimes that's a Monday effect. Sometimes it's a, hey, you never know,

honestly, what's going to happen. Oil, of course, was firmer on the the day. But you know, you gave the chance for some of the real momentum leading semis to take a pause, you know, the sand discs and such. And that said, the speculative stuff is not calming down. Bloom energy, core weave. They're not coming in. So I almost feel like we've almost reloaded the bubble energy a little bit. We'll see if that actually plays out. Well, as you mentioned, the NASDAX, the NASDAX move higher. Winning Street stopped at 13 sessions. Christina Parks and Levels got more on today's movers. Christina. Lucky 13. But oil prices were once again whipsod by the latest developments in the Middle

East as what had looked like de-escalation quickly gave away to renewed escalation. That helped lift energy names, including Texas, Pacific Land and Diamondback Energy. The move in crude also rippled through travel stocks, cruise lines like Norwegian Airlines, including United and Alaska air, all see a red on your screen, while American Airlines specifically said it's not engaged or interested in merger discussions with United. Chemical, fertilizer, names, They moved higher today, including Dow, CF Industries, Nutrient, as traders really continue to price in the impact of higher energy costs and any type of supply risk tied to this conflict and the blockage of the Strait of Hormuz in tech.

The group was mostly lower after last week's pretty strong run with Apple, the standout gainer today, but only at 1%. Alphabet fell into focus after reports is building an internal team to improve AI coding models and is also in talks with Marvell on new AI chips for inference, But I'll have more on that to Marvell deal and what it means for NVIDIA later on in the show. And then lastly, retail darling Intel, but also a big chip name, moved sharply lower today, about 4% lower, pausing. You guys use the word pausing, so I'm throwing it there. The stock's recent hot streak, of course, ahead of earnings just out this Thursday.

Guys? Our Christina, thank you. Well, rising oil prices. One reason perhaps the markets took a pause today for the latest on the situation with the Strait of Hormuz. Let's get to Pippa Stevens. Hi, Pippa. Hey, Michael. Oil prices did jump today as a year.

U.S. delegation is reportedly traveling to Islamabad soon. Following an escalation over the weekend that effectively closed the straight again, ship traffic did briefly rise on Saturday before dropping to a near standstill on Sunday. The U.S. seized an Iranian tanker yesterday, but new data from Lloyd's list shows that since the blockade took effect, as many as 26 shadow fleet vessels have continued moving in and out of Iranian ports and exporting Iranian origin cargo. Now, the ceasefire is set to expire on Wednesday, with city saying they're leaning toward an MOU being signed or an extension. Under that scenario, they see flows reaching pre-war levels by the end of June, with total losses of roughly 900 million barrels, which would put global inventories at their lowest level in eight years.

Should flows remain disrupted for another two months, the firm said global inventories would fall to their lowest level on record. Now, the U.S. also extending waivers on Russian oil to mid-May, after the Treasury Department previously said there would be no extension. India is buying a lot of those barrels with March imports rising by 900,000 barrels per day, month over month. Guys? Pippa, when you say shadow fleet, do you mean that those ships pay the Tehran toll? And do we know where those fleets are going? Are they China fleets headed for China or somewhere else? So these are Iranian ships specifically. So not the shadow fleet entirely, but just Iranian ships. And they're the ones that have been going both in and out. So it's not just cargoes leaving. It's also cargoes going west into the

Persian Gulf. Now, of course, the U.S. did seize a ship yesterday, so not all of the Iranian ships are getting through, but some of that oil is still hitting the market, and China has been the biggest buyer of Iranian oil. So it seems that even though this blockade has been in effect since last week and then also expanded, there are some ships getting through here still. All right, Pippa thanks. Pippa Stevens. Let's get the latest from the White House. Now, Amon Javers is standing by with that. Amen. Hey there, Melissa. Well, we still don't have any confirmation of the status of talks between the United States and Iran. The White House has not answered questions about when Vice President J.D. Vance

might be going to Pakistan for those talks. President Trump told the New York Post earlier today that he was already in the air. That's important because a foreign diplomat inside Tehran told MS now that the Iranian delegation will only travel to Pakistan for talks if the vice president is there for these negotiations. Meanwhile, this afternoon, the president has taken to social media in an attempt to shape public opinion on the conflict. He, writes, I'm winning a war by a lot. Things are going very well. Our military has been amazing. He added that Iran will not win the war because he himself is in charge. And he said the Iranian leadership has forced hundreds of ships toward the United States, mostly Texas,

Louisiana, and Alaska to get their oil. Thank you very much. All that comes after the Wall Street Journal reported earlier today that the United Arab Emirates initiated discussions with American officials about a possible financial backup from the U.S. as the financial damage from the war continues to spread. Now, it's an open question just how much damage this war has already done to the economies of Gulf nations. And in a possibly significant development, the Saudi press agency reported today that Saudi leader Mohammed bin Salman had a phone call with Chinese President Xi Jinping Monday to discuss regional and international security and economic repercussions. The two leaders reportedly discussed efforts to de-escalate tensions and enhanced

stability. So a lot of diplomacy between the United States and Iran and clearly some diplomacy there between the Gulf and China as well, guys. Beckerview. Yeah, Amon, so that paints a picture of a lot of complexity and a lot of these kind of bilateral discussions around the edges, but maybe all still feeds into this notion which, you know, the market taking this bright side view, that almost all the incentives push in the direction of somehow finding some kind of negotiated agreement here. Yeah, it seems like everybody in the Gulf wants to continue to do business. It seems like the president wants to find a way out of this, but with his war goals intact, right? So he needs to have an end to the Iranian nuclear effort in order to claim that the war itself was a success.

So how do you get from here to there? That's the part that's the trick, Mike. I mean, You look at what the president has said is he said that the United States has won the war already, that the attacks have been devastating on Iran already. And yet the Iranians have refused so far to capitulate. So does this blockade that Pippa was just talking about put so much economic pressure on the Iranian side that they have to cave in? Or the reverse case, does the blockade result in so much pressure on the West, on the Arab countries, on China that the United States is the one that has to capitulate. We'll see.

And I think a question here, Eamon, is how much pressure it will put on the U.S. consumer. I mean, it seems like there was a public, you know, fight, if you will, between President Trump and Energy Secretary Wright, when he said, Right, when it comes to his forecast about how high gas prices will stay this year. Yeah, the president said, I absolutely disagree with him when Wright said that the prices could stay elevated through the end of the year. The big question here is, you know, you look at those tankers that the president tweeted about this afternoon, all those tankers coming to the United States for oil.

Well, one way of looking at that is that that's a validation of American energy independence. Another way of looking at that is that's demand coming for American oil, and that means the price of American oil is going to go up over time. And what does that mean for American consumers? That has a political dimension to it that going into the midterms is going to be uncomfortable. for politicians who are in power now, including the President's party. So he's going to have to figure out exactly what to do if he can to mitigate the rising price of gas here at home, even as he tries to bring an end to this conflict overseas.

Yeah, high prices and high demand benefit, a narrow slice of the country and the rest pay. Amon, thank you very much. You bet. Despite some of those renewed tensions, the markets pose just small losses as the focus turns to earnings and investors look to play catch up amid this rally. So should you get in or wait for a downturn after such a record-setting two-week run? Joining us now is Ocean Kwong. He is Wells Fargo's chief equity strategist.

Good to see you. Good to see it. Thanks for having me. Does the speed of this rebound surprise you, worry you, encourage you? How do you feel about it? Yeah, it did definitely surprise us a little bit. But we still think that the market is going to overshoot to the upside. We have our upside target of 7300 by July, which is basically our year-end targets.

So basically like staying there from there. So few reasons. Number one, I think the economy is going to be fine for the next three months. There's usually a lag impact of oil shocks into the economy. Also, this time we have the one big beautiful bill tax returns, where that's going to actually more than offset the higher cost of living, at least for the next six months. And I still think the PMI cycle is going to re-accelerate going forward

because we are firmly in a restocking cycle, and this was a supply chain shock. And I think companies are going to feel a little skittish about their, low inventory levels, so they could potentially be double-oaring going forward, which is positive for the PMI cycle. And lastly, we think the AI cycle is actually maturing from a Kepx-led market to a monetization level market, which is healthier. How does that delayed inflation effect of higher energy prices play out in your view?

You mentioned the tax refunds for the one big, beautiful bill. A lot of strategists will come on and say that is offsetting what we're seeing in rising gas prices and energy prices. Morgan Stanley had a note out this morning saying, effect. effectively, if gas prices stay above 360 a gallon for an extended period of time, that's going to more than offset any gains that we're seeing from tax refunds, which have been coming in at 11 percent on average, which is lower than what many people had been expecting. How are you thinking about that predicted second half inflation surprise that you outline?

Yeah, so that's right. So if gasoline prices stay at these levels, over the next 12 months, the higher cost of living, gasoline plus the core CPI, is going to more than offset the tax return that the consumer is getting. But the point is, over the next 12 months, the tax returns happen today. So at least for the next three to six months, the consumer is going to actually have more cash in their pockets than the cost of living.

So that's why I think the market is going to actually be in the sugar high over the next three months or so. In terms of inflation, so we actually lowered our S&B target in March from 7,800 to 7,300. I mean, we're so bullish. But, you know, we, even before the war, we were highlighting that potential inflation risk in the second half the year is the biggest risk to equities. And with the war, that risk obviously has gone off.

So we are being prudent and taking down our S&P target a little bit. I still think inflation risk is the biggest risk to equities in the second half the year. But then I think ultimately it really depends on what the Fed does. If the Fed is okay with 3%, I think equities are still going to have a very strong year. If AI is transitioning from CAPEX led to monetization, what does that mean for the way that the relative performance of these sectors has gone? Because it really has been the highest conviction has been in the CAPEX, the infrastructure buildout. Yeah. I mean, Sammy's already de-rated as much as 50% from the highs. So I think valuation is already pressing in some of that risk.

In terms of hyperscalers, we were bearish hyperscalers all the way. We just turned bullish about a month ago, really on the idea that their free cash flow might be inflecting higher, which was the bare case scenario for hyperscalers. That has already played out. If you look at 2026 free cash flow estimates for hyperscalers, it's come down by 70% already. And our analysts actually think that there is more upside to that free cash flow number. So if they start showing some stabilization in free cash flow really driven by the top line growth, because there's a lot of capacity that's coming online, then I think that's the real bullcase for high. scalers and the market going forward. Is there any concern on your part that they're going to scale back or pause some of the

CAPX investment? They've all sort of inflated their budgets for this year because I would then have a knock-on effect on GDP, which has seen a huge boost to grow thanks to the CAPEX specifically of AI-tied infrastructure. Yeah, I think the overall AI CAP-X is going to continue to grow. That being said, the revision rate that we have seen every quarter for the past 10 quarters, I think that rate of change might be slowing down a little bit. I mean, last quarter alone, we saw a 25% increase in AI CAPEX curve overall.

So that 25% number is probably going to be coming down this quarter, not because they don't want to spend, but because they can't, because of supply shortages. Overall earnings, estimates have gone up for the index, but it has been very, very concentrated. How do you think the reporting season is going to be received? Yeah, I mean, I think all eyes are really on hyperscalers that are reporting next week. people kind of know that the economy is going to be okay or were okay in Q1 and probably okay in Q2 as well. But hyperscalers, what they say in terms of AI demand and their CAPX outlook, that's going to be key.

Does it concern you at all that consensus has moved so quickly toward believing that the war is over, that the worst we've seen? Just a second. I'll pause on that. We do want to show you a picture of the CBO. This is the closing bell happening there at the CBO. live. TMS is doing the honors there. We'll get back to the question that is. Are you worried that everybody sort of shifted to that side of the boat so quickly in this in this rally? Yeah, I mean, I think what the market did over the past month or so was it was a valuation

reset and a positioning risk. So that's why we are seeing this very sharp rally. I do think that if things re-escalate in the Middle East, then there's definitely more downside risk to equities. But if this is kind of like the new, and the market is pressing in, you know, $80-90 WTI, then I think the market is going to be fine. Yeah, and that's where we are around 90. Very good. Good to see you.

Good to see you. Thanks. All right, let's turn to Washington. Fed Chair nominee Kevin Warsh will appear before the Senate Banking Committee tomorrow for a confirmation hearing and is expected to emphasize the importance of Fed independence. Steve Leesman has that for us. Hey, Steve. Hey, Mike.

Yeah, Fed Chair nominee Kevin Worse will strike a note of optimism about the outlook for the U.S. economy in the Senate hearing tomorrow, according to testimony that he's released. While at the same time criticizing the very Fed, he hopes to join. He says this is a time of great consequence for the economy, the most significant hinge point in a couple of generations, and economic growth potential is rising. He's talking about tech, and in previous public statements, Warsh has been, pardon me, upbeat on the prospects for a tech and AI for the U.S. economy, saying in a May 25 interview, we're probably on the front end of use cases of AI. Everything technology touches, he says, gets cheaper. He said in a separate interview where he said central bankers need to make a bet on

technology before it's in the data. Otherwise, they will be late. Warsh's testimony also struck familiar themes of criticism of the central bank since he left as the Fed governor in 2011, including that it's straight into fiscal and social policies. Warsh will say Fed independence is essential on monetary policy, but best achieved achieving the dual mandate of stable prices and low unemployment and does not extend beyond monetary policy. He adds that Fed independence is not threatened when elected officials state their views on rates or reference to the president's consistent guides

and often harsh criticism of the Fed and Cherokee of Powell. What's your sense, Steve? Who is his audience tomorrow? Do you think that his audience is really President Trump and the markets? Do you think the audience are the people who might vote on his confirmation? I mean, I think this is in the bag, Melissa,

whenever he gets a vote. Now, that's the bigger story. I guess he could be so charming as to convince Senator Tillis to get rid of his objections to further the nominations while the criminal probe of Fed Chair Powell is still going on. But I doubt that. I think he has the Republicans. He's not going to get the Democrats. That's just the way it is.

Maybe he could get one or two. It's interesting. I believe he got a lot of Democratic support the first time around. I don't think that's going to happen this time. So he's got to maybe convince the markets, Melissa, that he's got the right ideas and going to proceed slowly and not radically. I was looking, guys, by the way, the stock market has recovered, but it's interesting that neither the bond market or the outlook for the Fed has recovered especially. If you go back to before the war, there was a 75% chance that by the end of this year, we'd be at 50, we'd be down by 50 basis points. Now there's like a 44% chance, guys, that will only cut 25.

Steve, thanks. Pleasured. Steve Leesman. While the S&P 500 has rallied nearly 9% so far in April, some stocks have not participated. Staples and utilities basically flat. We'll ask the chart master, Carter Worth, what to do with these left behind sections, sectors next on closing bell overtime. Live from the NASDAQ market site. Welcome back to closing bell overtime.

QXO, having its worst day in a month. but closing off the lows after announcing plans to acquire insulation company top build for $17 billion in a cash and stock deal. The acquisition will make QXO the second largest publicly traded building products distributor in North America in an investor presentation posted today. QXO stating that it will wash, rinse, repeat this plan with more M&A deals expected on the way. William Blair, writing in a note earlier this month, the QXO pipeline includes six large deals in discussion. Today's purchase would mark nearly $30 billion in acquisitions since the start of 2025. This is what they do. This is a roll-up company.

And an acknowledged roll-up company willing to use those words, right? So it's sort of like if you're invested in here, you kind of know what you're getting. The question is, you know, still valuation. I mean, what you end up having to pay when everybody in the industry kind of sees you coming. Right. I mean, you're rolling up this business. And I think today that was the market reaction. It seemed a little bit of a rich price.

Yeah. Obviously the target stock goes up a lot, but it did start down like 7, 8 percent. It did recover quite a bit over the course of the day. It's also very different from other acquisitions they've done in the past in terms of it having a very heavy labor component. Usually they don't like that. You can't control the costs on labor and this does. It's also a very big deal. Very big relative to its size. Exactly.

And so now analysts are saying are they going to go into another big deal? So that's sort of an interesting too. First Source Builders is one that had been mentioned. That's right. of on the radar as maybe a next sort of pipeline deal. Yeah, and it's also interesting in terms of whether this company is loading up in advance of a real home building cycle and a commercial construction cycle. Maybe it's an awkward moment to do that, or maybe it's opportune depending on the price,

obviously. All right. Coming up next, we'll get to the charts and see which sectors are buys and sells with Chartmaster Carter Worth. That's next. Shares of Marvell technology hired today on a reported deal with Google for AI chips. Let's bring back Christina Parts and Nelblis for now for a look on the ripple effect from this deal. Christina.

Well, you talked about this reported deal with Marvell to build specifically two new AI chips. And the market definitely reacted fast. You talked about Marvell being up 6 percent, Broadcom following on the news. But if you zoom out, this is actually a bigger story for Nvidia. Google is building custom chips specifically for inference. And that's the part of AI that runs models at scale every day. And that's exactly where NVIDIA has been trying to plant its flag. CEO Jensen Wong unveiled an inference-focused chip at GTC tech conference just last month,

working alongside GROC. And now Google is going custom with Marvell for the same workload. The inference market is definitely fragmenting. Hyper-scalers want chips built exactly for their workload, so cheaper, more efficient, and under their control. Invidia still owns training, and anything that doesn't fit a custom design still runs on NVIDIA. but the inference buildout is increasingly being carved up by custom silicon. Broadcom has Google locked through 2031. Now, Google is adding Marvell for inference.

That's not a contradiction. That's just how big this market has gotten. And if these Google talks with Marvell turn into a signed deal, Marvell is now in business with every major hyperscaler, which signifies that the pie just keeps growing right now. Yeah, exactly. I mean, you know, in terms of, you know, Broadcom, backing off a little bit today.

And, you know, it was pretty consistent with what happened with Intel and AMD and Micron. In other words, a lot of these stocks that had kind of let us off the lows did take a pause today. So I'm trying to figure out how much of this sector was reacting to this news and how much of it was just market dynamic. I do agree with you that it's probably more market dynamics in regards to Broadcom, given the run up. And the same thing with Intel. You used the word pause before, and that seems to be the case for many of these chip names. But this is really a A big winner, should I say, for Marvell, because they've been under the radar.

Often Broadcom gets all the attention for the custom silicon, but Marvell has been partnering with a lot of hyperscalers as well. And this Google collaboration not only on one chip, but two chips would really signify the strength in their design capabilities. The only difference, though, is that Broadcom just last week's filed an 8K, and, you know, provided some numbers. I've reached out to Marvell twice trying to get confirmation. I've checked every other news outlet.

I don't think they've actually confirmed this report, which is. why I'm using the words reportedly. It's been rumor now for about a week, so probably it stems from some truth, but we just need to always keep that in mind, because sometimes some of these deals can now go a different direction. Christina, thanks. Christina Parts Nevelace. Small losses for the markets today, but still very close to all-time highs during this record rally. Some sectors have bounced back strongly, but a few only barely budged and a few remain in the red. How should you play these groups now? Carter Worth joins us now, CEO and founder of Worth Charting.

Carter, financials is up. Why don't you go through? Sure, let's do it. We've got three sectors look at it, but starting with financials. So what we know, of course, is this drops more than the market on the sell-off about 15%. And then it rallies more than the market about 11, 12. But the problem is, I mean, less than the market, we're right up against a declining 150-day moving average. And that's a tough spot.

So to my eye, that's a fade-it, a rally to a difficult level. Remember, of course, it's the second biggest sector at 12.2% in two stocks. J.P. Morgan and Berkshire represent 24% of the entire sector. Exactly. Your next look is consumer staples, which is interesting because I have to say this one is out of favor, both on a fundamental and to a large degree technical basis. So what do you think? Yeah, so what was important here is, of course, this surge to a new high, which was very defensive when the market was selling off. And now we have the equal and opposite reaction as the market is ricocheted. But the sell-off after a breakout is typically a very good entry point.

So breaking out from a range, coming back to the level from which the breakout occurred, playing for long. Of course, not a very big sector, 5% in Walmart and Costco, 24, 22% weight. You're also looking at utilities, which also didn't really participate in this rally, basically flat. Yeah, so utilities, of course, they're the only ones that made a slight new high after the market itself, a very small sort of 7% dip with the market, but an 8% recovery to a new high. And generally speaking, this is the very definition of a 45 degrees, 45 degrees, 405 degrees, steady as she goes, north by northeast. We like that kind of thing.

That's a stay-long, be-long for us, and we would add to longs. Carter, why don't you come on over and, you know, we've been doing this for a while, Carter. And I think that you always say the utilities are probably the best performing sector. If you just invest in utility to the very start. Of course, you can, which way you start your timeline, right? Where you start the meter. Right. What is remarkable is that since the March 2000 peak to present, the total return of utilities

equals the total return of the S&P. All this work we're doing. Should we get in on a software, overweight energy, and, you know, the tortoise and the hair? Yeah, with lower volatility, of course. Of course. So on a risk-adjusted basis, a much higher return series. What does the character of this overall market come back tell you, how impulsive...

So all of the studies, and you've seen them coming out, is that, look, we know momentum, is a powerful force. Body in motion stays emotional, all the good things. And so this kind of strength, there's an old antididium, strength where strength is unlikely, has to be respected. Right? That's the Rocky Balboa. He's down. He shouldn't get up. He gets back up. He gets back up. After five months of selling, with the median stock down 25% in the Russell 3,000, and then a two-week rally that takes you almost back to the high. Obviously, day-to-day, it's overdone, we're backing and filling. But if you look forward, a lot of the studies of just when this has happened before, or when you've had 13 days in a row, the NASDAQ 100 up this month.

It follows through. Carter, sorry, we've got breaking news. I want to go straight to Julia Borson for that. Julia. Tim Cook is going to become Apple's executive chairman. Stepping down from the CEO role, Tim Cook to become Apple executive chairman, the new CEO of Apple,

John Ternis, is to become Apple's CEO. Ternis is currently SVP of hardware engineering. This will be effective September 1st of this year. This transition approved unanimously by the Board of Directors. directors, Cook will continue his role of CEO throughout the summer as he works with Ternis on a transition. And then the press release here is saying Cook will assist with certain aspects of the company, including engaging with policymakers around the world in the role of executive chairman, which he will assume as of September 1st, while Ternus, SVP of hardware engineering, becomes the CEO.

Just going to read a quick note here in the press release from Cook, a quote from Cook saying, John Turnus has the mind of an engineer, the soul of an innovator, and the heart to lead with integrity and with honors, noting that he has contributed to Apple over 25 years. So this is a big change for Apple, perhaps not unexpected. The stock down about 2% in after hours trading, but there has been a lot of speculation that Cook might be leaving that CEO role. Now we have the new September 1st is the date. Back over to you. All right. Julia, thank you. Keep us post with any other sort of reaction. to see that they implanted a hardware and engineering expert in, this is the top role, whereas Tim Cook was an operations for a supply chain expert at the time that he took over.

Yes. So still reinforcing the, first of all, kind of considered the heir parent coming into this phase when it was sort of reported that Cook was looking for a moment to make his exit. But yeah, reasserting the fact, for all that services matters for Apple, it all runs through the devices, it all runs through the innovation on that level. So sort of fascinating on that level. This is not a company that it's had many CEO transitions, obviously. Right. You've only had a couple in a couple decades.

Yeah. Carter Braxtonworth, thank you. We want to stick with this Apple News. Bring in Deep Waters, Gene Munster now for some more reaction. Gene, thanks for jumping on the line for us. We appreciate it. What's your take on the news? It's about two years earlier than what I was expecting. I really thought Cook was going to kind of see the Trump administration to its,

kind of as soon as Trump was done, he's done such a good job of navigating the uncertainties around there, surprised around that. I mean, that's kind of, in some ways, kind of focusing on the details. The big picture is that this is something that we, of course, have been expecting for a long time. And it's worth noting that even though it's coming early, this is a big deal. And, you know, there's obviously a lot of momentum around what they've built, but Cook has done an incredible job of navigating what is essentially like almost like a president of a country, not a company type of a role.

And I think when it comes to Apple, what their greatest, I think one of the greatest gifts that Steve Jobs gave the company was the gift of transitions. And he just, he did over a three-year period, worked with Cook on that. And I think that's going to just kind of test this, you know, their continued ability to do that. I suspect that Tim's been thinking a lot and doing a lot of work around this and wanting to carry on what jobs did for him 15, 16 years ago. And, you know, Gene, there was some talk leading up to this of, you know, there has been some high-level turnover, basically retirements, people preparing for retirement, CFO, CEO-type roles. I guess on one level that will clear the way for Ternus to decide who the brain trust is. The other piece of it is, I wonder where Apple is in its campaign of persuading the world that it's got an AI strategy sorted out, that it's going to be handing over to a new CEO, or is that going to be his to devise?

That's for his to divide. That's the opportunity here. And, you know, my initial reaction is just disappointment because I thought we had a couple more years left with them. but this is Apple does a wonderful job of navigating through difficult times and I think that that's the narrative that needs to happen I've been a strong believer that amongst the Mag 7 the biggest opportunity is for Apple to change the narrative from they don't have competency in AI to they get it and even though Cook's done this incredible job around kind of the geopolitical side the next frontier of being a successful tech company is much bigger than geopolitical.

It's about nailing AI. And so Apple has a big opportunity there in personalized AI. We recently bought more Apple stock based on that. And I think that there's an opportunity for Apple to tell a story to investors. And that could be quite compelling that they're going to get this. And we'll see who he brings on who he hires. And undoubtedly there's going to be some big names that will be joining Apple. in the next six months.

Do you have any sort of picture or gleaning of what the path ahead immediately might be for Apple with Ternus at the helm, given that he is the head of hardware and engineering? Well, the easy stuff is in a few weeks we'll get to hear from him on their earnings call, and I suspect that we'll be paying buzzword bingo with AI, and how many times he mentions that. And so that's going to be our first instance. My sense to answer your question is that. that there is obviously great ranks at Apple, but they need to fill the ranks with some outside inspiration,

these AI-first companies that have done so well. I suspect that we're going to see some hiring from the Anthropics, the Open AIs of the World, the X-AIs of the world, the X-AIs of the world. And so I think that's the big opportunity for Ternus. And I think we'll hear his game plan in a few weeks, a couple weeks, I guess, on the earnings call next week. and we'll definitely be keen to hiring. That's the key.

As far as the substance, kind of, Mike, where you're going on with that, too, is that we've got to hear from what's going on at WWDC and just to see some of the substance around the new series. You know, one of the things a CEO transition enables is maybe, you know, buying a little bit of time, right? The street is to get to know the new person. and they have maybe get a little bit of leeway before there's a firm strategy in place. Where is Apple in terms of, you know, even the iPhone upgrade cycle?

Is this a sensible spot to actually make this turn? Or is that stuff more or less on autopilot? Well, it's not on autopilot because it has good years and bad years. And I think this is also a sign that the numbers are going to be fine. I would be shocked if anything, if Tim would leave in the midst of some difficult numbers. You know, they've had plenty of time to pre-announce if anything was wrong. And my expectation is that they're going to beat the numbers for the March quarter, that they will guide the streets looking for 10% growth for the June quarter.

My guess is that they give guidance to slightly above that. So as far as the business is doing great, but that's kind of the tail of two cities is, you know, give them credit for the business is doing great, but the business is going to change in the next five, 10 years with AI-first consumer devices. No one's cracked the code on that. There's been no successful AI consumer. device and that's the opportunity that Ternus is going to be going after. And so he does come

at it with the tailwind of a core business that's doing exceptionally well with no clear competition in terms of who's going to be successful in AI consumer devices. And now he's got, you know, a mandate to change the narrative. That's powerful. That's what Google did a year ago. Stock doubled on that on changing the narrative. And that's, I think, the opportunity here. If not for that opportunity to change the narrative. I'd expect the stock to be down more and I actually think that probably no days and months ahead the stock rallies on John and the fresh ideas that inevitably he'll bring. Yeah, stock just hesitating here down less than 1%. Gene, stay with us. Let's bring in Gil Loria. He's analyst at DA Davidson. Gil, what's your first impression

of how an investor should think about this transition? Overall, I would say this is good news. To Gene's point, Tim Cook wouldn't be retiring at a time of crisis. He has an opportunity to walk away, at a time with record iPhone sales and significant growth, a good upgrade year, and a nice roadmap ahead. The second big takeaway is that the CEO is a hardware guy, not a software guy, not Craig Federi, but John Turnus. That means that a lot of the path ahead has to do with hardware innovation. So glasses, pins, folding phones, at some point.

a more less expensive virtual reality device than Vision Pro. We haven't had a lot of innovation around hardware up until now, but that is Apple's lane. They're letting everybody else spend a lot of money on CAPEX for the AI models. Apple feels like their innovation will continue to be in hardware, and the AI models will flow through their market-leading premium hardware. So I'd say those are the two big, takeaways from me. But I would consider this good news. Tim Cook had a chance to retire on pop,

and this looks like what the situation we're looking at. Let's say your predictions are right, Gail, in terms of Apple staying in the hardware lane. Are you more relieved? Do you think investors should be more relieved, that at least for the foreseeable future with the next chapter of the company, there will be unlikely to join in this sort of CAPEX race? Yes. Yes. I mean, look, They spend a lot on R&D and CAPEX by their standards, but it's obviously a rounding error compared to what Amazon, Microsoft, Google, and Matter spending, chasing the top model, the top frontier model where Apple can just sit back and let those guys compete.

Eventually, they'll only be two or three leading models, and they'll all have to work through Apple devices because most consumers, especially one's willing to spend on, subscriptions are using an Apple device. So that should be a relief to investors. It's unlikely that they're going to jump in as the sixth frontier model competitor when they can let everybody else compete on that front and then just leverage the winning result. Yeah, I mean, Gene, on that score, I mean, you seem to think that, you know, Apple has a kind of a high-stakes process where they have to decide how big to go or exactly how to approach AI. What about the

idea that with the Google deal locked up and, and, you know, whatever AI capabilities consumers are going to use are running through their devices, that they're at a good spot. A good spot if they can get the new theory to do what they've said it's going to do. And that's been the issue with the narrative on the name. And so, but from to your point, like the bigger strategy, they're in a good spot. Let's go the CapEx Light Route. I think that's going to play well for them. And they're going to continue down that road.

They're not going to get into some. they're not going to join the AI arms race. But I think that, you know, this comes down to, you know, Ternus's, the view that the street's going to have on him is going to be largely influenced by how Siri rolls out. Now, remember, it's not going to be this moment in June after WWDC when the new series released and everything's okay. It's going to be a stage rollout where people will start to better understand

with the concept of personalized AI agents, with apps and working on platform, it's getting that right ultimately is probably job number one. It's not about spending on CAP-X. Yeah, would you agree with that, Gil? Yeah, and I couldn't agree more about S-I-R-I. I won't use caller by name because I'm using one of their devices and she'd wake up. But yes, that has been very disappointing. It has to work better.

We are getting very acclimated to using Chad GPT and Gemini to communicate duplex. So have a conversation that sounds natural where the, at Claude, of course, where the model does what we ask it to do, even if we're not clear, even if we hesitate, even if we jump around, the models understand us and they're executing, and they're executing in voice mode. And SIRI is not doing that right now. And it better start doing that suit to Gene's point, because that is where the consumer expectation is. Again, hardware takes you pretty far. That is their lane, but the software has to work properly for consumers to continue to stay engaged on that platform, as opposed to go onto another platform. What Apple doesn't want you to do is to continue to go to

the Clod app and the Gemini app and the Chad GPT app. They really want you to talk to their native voice communication and execute in the apps through the app. that, and that's something they haven't accomplished yet, but it's definitely on the roadmap. Gil, Steve Jobs returned to Apple almost 30 years ago as CEO after that time away. Tim Cook's been CEO for almost 15 years. John Turner's is like 50 years old, so presumably it's going to have a long runway as CEO. At least that's the plan. How well does the street know him or have a handle on his approach? Well, enough. I mean, being that senior at Apple means you're a celebrity to begin with. And then the execution on the hardware front

has been relatively impressive. So I believe investors will be comfortable with that appointment. I would not expect Tim Cook to come back anytime soon. But it is worth pointing out that when one CEO leaves on top, that means that there could be a little bit of a hangover later on. Let's not forget, I started with record iPhone sales, a big upgrade cycle that may continue for a couple more quarters, but the best way to have a tough comp is to comp a good result. And if Apple doesn't introduce enough innovation in WWDC and in September, the next iPhone year, iPhone 18, may actually be a really tough comp, may actually have some negative results. So we do have to keep that in mind. Now, if they have a fantastic foldable phone that pulls up the ASP and maybe

some other hardware that can pull, pull some revenue along. They could still have a good comp on this upgrade year. But let's not keep in mind that retiring on top means you're leaving the next person with a harder road to go. Sure, absolutely can be the case. Gil, thanks very much for the time. Gene's going to stay with us. Let's bring on our own John Ford. John, what are you top of my reactions here? Well, this is huge. This is absolutely huge. I think about when Tim Cook came into Apple. He came in because he filled in a space where Steve Jobs was good and was on logistics in dealing with inventory.

Apple was the struggling company. Tim Cook had a real ability and specialization in making the trains run on time. And really since then, under Tim Cook, Apple has continued to transform from a company that could invent into a company that could execute. Now, interestingly, we've got this new time period now under AI where there are different kinds of questions around execution. It's more about software on that side versus on the hardware side. So it's also interesting that you've got a real hardware mind at Apple taking the helm as Tim Cook, not entirely retires, but steps into an executive chairman role. To me, that speaks to Apple, continuing to focus on its core mission and what it's always done, vertical integration.

It's not all about one thing, not all about the other. This isn't a panicked move trying to do something in AI specifically, but it's more a continuation of legacy, Mike. Do you think possibly this is Apple's way of sort of conceding that space? So we're not going to be first. We're not going to develop our own, but no, okay. You're already shaking your head. We will continue to license and spend more efficiently.

Apple has a real belief system around how it operates, how it designs, and what it brings the world. It's not a matter of trend chasing. I mean, we both remember the times when people were saying, Apple has to come out with a TV. Apple has to have a car. Apple has to buy Tesla. If it made $1 trillion in market cap,

if it's going to make $2 trillion, it has to have something beyond the iPhone. Well, none of that was exactly true. And Apple has continued to thrive, perhaps not as much as somewhat hope, but within sticking to its knitting of saying, we're going to focus on what end consumers want, what delights them, and how we can deliver the best experience to them, given the broad technologies available and what we can invent. My sense is that Apple is continuing to do that.

They haven't succeeded in hitting AI right on the head as far as some breakthrough product or technology. But arguably, Melissa, nobody has. I mean, yeah, we've got AI versions of search, but we don't yet have devices. services, and unique software that's entirely built for the AI era. I think Apple still believes that they can invent and even lead there. John, great to get your take. Thank you. John Ford.

Dan Nathan, Fast Money Trader, co-founder of Risk Reversal Media, is here with his thoughts on this really historic move here. I think you actually predicted Cook was going to step down sometime this year. It's an anniversary year for the 50th anniversary. They've been signaling, right, about succession there. And when you think about it, I remember being on the fast money desk the day that he took over in 2011, right? And, you know, since then, the company has obviously become the largest market cap company in the world, just seeded that initially to Microsoft, then to Invidia. And, you know, listen to John talk about product there.

I mean, if you think about when Tim Cook took over, most of the products that they get most of their revenue from are already out there. And I remember going back and listening to or reading the book, you know, about Steve Jobs. I mean, Steve Jobs specifically said about Tim Cook, he's a product guy. I think he felt really comfortable about leaving it in his hands to build out these products that he had already put out into the world. But, you know, it's interesting when you think about mega-cap tech stocks and really one of the major innovations I think Tim Cook did is buybacks and dividends. And for a company of this size that's meant to innovate, they have really, I think they've returned maybe a trillion dollars worth of cash since 2012 when they started their buyback. I think it's over $700 billion. That's pretty astounding for a company that had $100 billion in sales in 2011,

and now they have over $400 billion. And they own the high-end market, obviously. That does say something about the starting point for Tim Cook, though, in terms of the bonanza of that second iPhone generation, just bringing in profits. They couldn't do anything else with the money, right? It was just too profitable. The stock traded a 10, 11, 12 times earnings.

I mean, it was super cheap, and it was really fascinating because Wall Street, was unwilling to give a real multiple to a hardware company that they felt was hit-driven. You know, what's the next generation going to look like? Obviously, we're in a different spot now, right? We're in 30, high-20s forward multiple. Yeah, but, you know, Warren Buffett saw that back in 2014 or 15 when he bought the stock. And I think that he was, like, focused on the buybacks, the dividends, that sort of thing. He didn't think the company had to innovate that much.

But also the predictability of the product set. And the fact that it's kind of just a necessity and it just, you know, is not. something that's going to go away. Yeah, and I don't think this is the sort of thing. I don't think there people are going to hit the sell button on this one. I mean, I think Tim Cook had done an amazing job kind of stewarding him into this new. You just saw that diagram that got set up there about CAPX and all of its major competitors. I mean, the fact is that a lot of analysts were saying, hey, this is a problem. They're only spending three, four percent of their revenue on CAPX. Well, it kind of worked out. I don't think folks are spending a lot of time figuring out what the

depreciation is on all those GPUs and the data centers that they built because they didn't build them. And all they have to do is license that technology, which we think, is probably going to be fairly well commoditized, especially when you think about who their end user is, which is a consumer, especially when you think about their installed-based iOS, about $2 billion globally. Yeah, I was going to say that they've never been a high-capx company,

and they never had to be. And it's just a matter of whether the market gives them credit for that or decides that they're not doing enough. Dan, thanks very much. My pleasure. Appreciate it. Let's bring it Patrick Moorhead of more insights. Patrick, first of all,

You have a view as to this choice, as Tim Cook's successor, and what would kind of job one be in your mind? Yeah, so Ternus really is the, I'll call it the continuity candidate. He's not a risk-taking visionary, right? So what I'm expecting, and I think the street should expect, is tight operational execution, margin management, and incremental product iteration. I think that's what the institutional side of the House really wants, as opposed to, swing you around the room AI features, which up to this point, the company hasn't needed at all. I think the biggest point here is, in addition to Turinus, is probably Surugi, right?

He has brought what I consider one of the biggest lock-ins that the company has on the hardware side, and there were some rumors about him moving, and quite frankly, the market for very experienced and very good semiconductor leaders is very high in this AI market. So walking him in, I think, is very important. So from Strugi and given Ternus' background, I mean, do you expect a host of new hardware models to hit, you know, the markets in the coming years, that that's where most of the effort, the dollars will be spent in terms of innovation, new products through which AI can flow through? Short answer is yes, but I don't think they're going to be dramatically, dramatically different. Up to this point, AI not maximizing AI itself, in other words, it's a good conduit.

If you have a browser and some integration on Apple's side, you don't get locked out from that. I'm not expecting dramatically new form factors. We might see a pair of XR glasses that have been in in construction and design. for a long time, but I really think we will see a lot of what we saw before, which was a mining of Steve Jobs' vision moving forward. How much longer can the company do that before it has to actually go forth and release something to the world that is mind-blowing? That's the $2 trillion question.

It is growing with Max. If it decided to, it could probably take more share. And then the question is, what does that do on the profit side? Apple doesn't create loss leaders. I think as long as Apple keeps delivering exceptional experiences and the competition doesn't come in and either do a completely different view or something like an open AI branded and powered camera or glasses. It's going to be very hard to disrupt this company.

What about, I mean, Apple obviously was arguably early on the, you know, developing its own chips and had great success there. Where does that sit relative to what everybody else is doing? So I'd like to say that everybody is catching up, but it's a vertical integration play. I think the closest thing we have is Samsung. And while they're not creating all of their chips, they're creating a lot of their chips,

particularly for the mid-range and the low-end, but we do not yet have PC manufacturers and a lot of tablet manufacturers that are running an integrated play. And integrated gets you not only some unique differentiation, but also a dramatic cost decreases out there. And I think Apple's latest Neo, where it's dramatically lower

than a decent quality Windows PC, is proof-positive of what a... can deliver. Patrick, really appreciate it. Thanks very much. You see Apple just about hanging on to that $4 trillion valuation on this news. That's going to do it for overtime today.