Well break down the numbers later, we are closing out our series on the cannabis craze with a deep dive into green thumb. We start off with a big developing story at apple as that stock hits a fresh alltime high epic gains after apple removes fortnite from the app store. Epic blasting apple. Take a look. We shall prevail. Lets get more on this developing story jewuli julia . Epic is taking legal action after apple after apple removed fortnite from the app store. Emmick posting this individ g epic posting this video with the hashtag free fortnite. Apple saying that epic has benefitted from the App Store Ecosystem for a decade saying their business interests now lead them to push for a special arrangement and not change the facts these guidelines could level the Playing Field for all developers and make the store safe for all users epic says it isnt seeking monetary compensation but injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers. This all comes just a few weeks after tim cook participated in those antitrust hearings on capitol hill we just got a note from spotify. Spotify also distributes to the app store. They tell us they applaud epic games decision to take a stand against apple and apples abuse of this dominant position. Getting some support there from spotify. Julia boar ston we heard about these apps in the past of smaller App Developers suing apple. When you take on the likes of a fortnite, it sort of changes the magnitude and the potential impact of this of course f this actually plays out in court, this is sort of the antitrust battle that congress wanted to take on that would be played out in the Justice System instead gives congress the opportunity to litigate this thing through the courts in a different way than maybe they have the initiative to do right now. When you have spotify weighing in for epic games, this is something thats not going to go away the only way it goes away is through regulation or if apple changes the way it does business they are a massive gatekeeper to any innovation thats going to come on their platform through the ios. I dont think the stock is going to trade poorly off of it. They were in litigation with samsung. I dont think it really had a huge impact on the stock even when those phones had certain bans about shipping. To me, this is a headline risk its the sort of thing that will probably get going in europe a bit more than here in the u. S. Apple will likely have to make some compromises or they may be faced with some very large antitrust suits in the next years. Think about who fortnite could band with, could side with go back to ten cent. It owns 40 of fortnite. It majority owns riot games as well riot games is going to put league of legends on mobile sometime in the fall youve got a juggernaut there fighting apple potentially think about for ten cent also the exposure they have on we chat which again gets them back to where the chinese are going to complain. Ten cent has been struggling, down big today yes, i think ten cent is the strongest, the most powerful Gaming Company in the world, period they own about 40 of epic games. Seven or eight years ago they b bought 40 when you think about apple and where it is in the cycle of this move and you think about how much thats been based upon services, the map around the app store and the impact to what that means for services revenue, its massive in terms of overall revenue, its 810 of apples overall profitability. Its a very big number, i think, in the big picture but in the short run, i dont think this is about anticompetitive i think if anything it means these companies have to find another avenue to bring it i think this will create other avenues. This may be what apple will be most upset about is theyre forcing other competitors. You mentioned that 810 of profit coming from services. I agree shortterm thats a small impact guy, in the longterm isnt that a big portion of the growth story, this notion that services is going to be the future. If you take away that part of the fly wheel where apple gets a 30 cut from all the apps on the app store, that could add up to be a lot. Yeah. To your point, i think Service Revenue is now 22 of overall revenue. That numbers been trending in the right direction. Thats why the multiple continues to move in their favor. Yes. Theres also a huge leap from one company taking on apple to their entire ecosystem as julia said and as you know, these companies have benefitted from being part of that Apple Ecosystem whether they acknowledge it or not. They just want to get it cheaper, i guess if there are better places for them to be and cheaper places, im sure they will pursue it to tims point, there are other places they can go apple does not have a monopoly here i think there are reasons to sell apple here, to be taking profits. I dont think this is one of them i will point out and we do it all the time, there are a lot of people that say buy it and hold it and own it. Thats correct at an alltime high its hard to argue with that. Remember in the fall of 2018 this was a stock making an alltime high of 220 and within a month and a half trading at 140 and recently seven or eight months ago made an all time high of 335 and basically cratered down to 220. The stock does move to the downside from time to time apple is playing a very difficult game if they take a hard line and say epic, you can go elsewhere, it does risk saying no to a lot of the most popular apps out there that kids want, that people want on their phones. Those people might not buy an apple phone in the next upgrade cycle. The context of this stock being at an alltime high s th, is th concern . I think those are two separate things. Im hesitant to extrapolate one particular customer of apple and extrapolating that to its entire customer base. Yes, while epic gaming is a large participant, ten cent, all those things, its a large concentration. Weve seen cyclicality and changes in those bases the constant is apple. Its really tough to bet against them grant what had y granted this is still a behemoth that is extremely profitable across verticals i think this is more of a headline risk but im hesitant to apply it in generalities. I guess i put the two together in terms of where the stock is if you think the stock may be overvalued, this may be the headline risk you want to take some profits on, dan. Yeah. You know, i think these guys all make great points. I think tims point about we chat is a huge one if you think about china, guy just said apple doesnt have a monopoly they have nearly 45 of the smart phone market here in the u. S. And much greater of the high end smart phone market. Their market share in china is less they have a huge issue with we chat we chat is basically just the app layer that could sit on a much cheaper phone in emerging markets like china i think you have to put all this stuff together and say they could have an issue with we chat in china just a nationalistic fervor, people staying away from apple products and you could have an issue here if people are not buying those products because they are not allowed to come through the ios app store. That could be a huge issue i think apple also faces the risk with the we chat tiktok deal what if the chinese say we are going to start regulating your app store . I think theres a lot of issues here with the stock at alltime highs. This stock has gained over 300 billion in market cap. Staggering. Joining me former apple ceo john skully great to have you with us. Youre an extreme bull in terms of these risks weve been talking about, do any of these concern you . Its been a great discussion, a lot of really smart insight from your panel. What i would add to it, falirsto all, services is really the big part through this second ive seen services reaching 50 billion of profits by 2025 i look at it in terms of what are the things apple can control. One of them is the Terrific Technology that they now have with their vertical integration into the iphone. The iphone is not going away in the decade of the 2020s. In fact, if you look at the micro processor technologies apple has invested in, some people have estimated that by 2030 the iphone may be a billion times more powerful than the original iphone that steve jobs introduced think about that what thwhat th services think about when 5g is fully deployed around the world. Apple has a great runway ahead of them. Its the most Competent Company maybe in the world in terms of its ability to run operations, execute. Many people have said why isnt it more innovative well, it actually is very innovative in the things that are important inbilling its ecosystem. For example, the library that apple announced this year that only makes it more easy for people to be able to add more apps and be able to upgrade apps and things of that sort. Thats the engine of profitability for apple is in the services, particularly the app store. Im very bullish on apple i think theyll hit 2 trillion market cap by the end of this year i would guess by 2025 well be talking about 2. 5 trillion. This is clearly a company that is in for a long, long run. You mentioned market cap. To dans earlier point, heres a company thats added a trillion dollars. Its remarkable but since the march low 300 billion or so in the last seven or eight trading days my question is, is the market underestimating the potential for apple to be caught up in these continuing, ongoing and escalating u. S. china rhetoric, the back and forth in terms of whats going on between these two countries . Can the chinese escalate and could apple find themselves in the crosshairs of course they could escalate remember, were in an Election Year we have three months to go until te electio the election i think you have to discount a lot of the things that are being said until we get past the election apple is not going away before the election i look at apple not in terms of how does it look today im holding apple. Im not selling apple. If anything, weve been buying apple over the careyears, not selling. I believe well have a much clearer picture regardless of who wins or loses the election as to what the risks are with china. It would be really a stupid thing for either china or the United States to start to try to have a war with their Major Companies like ten cent and alibaba and apple and others it doesnt make any sense to me. I think cooler minds will come to their senses. Lets get past the election. All right john scully always great to hear your thoughts, former president of apple right now were saying oh its just fortnite. It could be riot spotify came out with a statement in support of epic games. Is there a risk that major apps ban together and say enough of this it is like that ad that parodie that 1980s commercial that apple put together youve got all these different players in this eventually throwing that hammer at the screen yeah. I think theres an argument, though i think this is where dan was also referencing where are they going to play these games . Ultimately thats one of the big issues so the dominance of the hand set of the install base, the dominance of the ios system is something that need to be addressed. Again, i do agree and i think when you talk about riot games and activism blizzard, all things that ten cent has a major stake in in addition to fortnite they are certainly in terms of the gaming community, they could be one of the strongest players. Very interesting also what mr. Scully referenced is this whole dynamic of mega cap tech Companies Like apple better off, worse off or indifferent as to who the next president of the United States is i think you have to be really careful to expect a change in administration changing the tone maybe the style will be different, but this is a very bipartisan issue in washington in fact, i would argue that there are democrats that have made this a bigger agenda item for them than even republicans if investors are looking at mega cap tech as an investment where on the days biden is ahead in the polls so its safe to buy mega cap tech company because china will thaw. Applied materials rallying 2 of earnings results. Lower quarter they reported 1. 06 a share. Thats 10 cents beater than the analysts estimates. And 4. 4 billion in revenues is more than a quarter billion dollars above. Applied materials is also raising its outlook well above analysts estimates. The ceo noted that the auto makers remain week but the pandemic is driving and accelerating what he calls a Major Technology inflection for semiequipment due to working from home, on lyle retaline ret. He believes levels will be sustained or higher in 2021. They also updated as well on their acquisition of that 2. 2 billion deal they did a year ago. So far they say they hope to close it soon but they have not given an end date. That deal happened like 13 months ago so thats still hanging in the air ov bertha, thank you bonawyn, what do you make of this quarter good question so as she mentioned they beat on top and bottom line. I think thats important definitely something to take into consideration i think what were seeing in this space and others is what guidance looks like. All arrows are pointing upward there in terms of demand and margin i they have about 5 billion of cash theyve been on a strong up trend. That 1. 06 number came in stronger than the 95 cent figure that was expected. I think strong Quarterly Earnings in addition to guidance and showing robust strength through this covid situation is really a reason to continue to ride this trend higher. Up 2 right now in the after hours. Some of techs most popular names have been left in the dust intel micron and cisco getting hit hard this is the old name tech stories not doing so hot especially as we witness them report earnings and the after hours action. Yeah. Some of these legacy names intel was Pretty Company specific but i think some of the things they had to say fly a little bit in the face about spending Going Forward i can point at western digitals disappointing report last week then theres micron. The stock road down today on a broker downgrade talking about weak demand for memory right there. You put that all together with cis ciscos really disappointing quarter. It was a mess. I know tim was chatting about this a little bit. That is not what you want to hear about Enterprise Spending when youre seeing so much of technology having their multiples expanded it is a winnertakeall and it seems like these legacy tech names, the cheaper they are, the worse they act right now. We saw the impact across dell, hewlettpackard, all of those sorts of names in this session today. Deutsche bank downgraded not only micron but a few other names. The concern for micron is how cyclical the company was it seemed to push through that a couple years ago but now seems to be right back into that commodityized problem where the market gets really concerned it really comes down to this there will be people that play micron for the catchup trade but in this environment that really hasnt worked the winners continue to outperform and the losers get punished once upon a time Cisco Systems used to be viewed as the bell weather in Technology Today what is that bell weather in your view Chuck Robbins was talking about the delay in purchases essentially pushing down to the consumer stack and where theyre even more concerned when you look at the entirety of the smaller businesses and even more limited resources. Its fascinating to think about the conversation were also having at apple versus intel and cisco when you think about how apple has slowly transformed itself into a recurring revenue Stream Company the story with cisco is where its trying to get into software, security it is doing that, but they havent rotated as fast. Its pretty clear and in fact if you think about intel and the chip and the issues there with x86 theres a lot of different tentacles there but intel and cisco are lose right now in the cutting edge and the leading edge technology, or they havent transformed their business into recurring Revenue Streams and theyre still hardware plays you get the sense there is less money to be spent and its probably not going to hardware right now. Coming up, well identify into the numbers later apples doing it, teslas doing it whos next some of the high price tag stocks that might be heading to splitsville. They help us with achievable steps along the way. 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