Apple is above 467. 77 making it the first u. S. Company to have a market cap above 2 trillion, a discussion a few moments ago about tim cook and how he has led stewardship of the company through all kinds of cross currents josh lipton joins us to talk more about that. Josh, its funny to look at that change of market cap and think back to some of the more cautionary calls weve gotten in the past few weeks from the likes of b of a who worry about margin pressure on phones, margin pressure on services, less impact from the buyback and so forth yeah. Listen, you look at this recent run, carl, obviously they had those earnings in late july that blue past the streets expectation. You saw strong growth in sales of the new low cost iphone sc. You can chalk this recent run to a few big trends one, theyll say listen in Uncertain Times cash is king and obviously apple has a lot of it, net cash position of 81 billion and counting also, that work from home trend is clearly helping apple or at least certain apple products and services again, look at the last Earnings Report, max sales, ipad sales much stronger than the street was looking for. Finally clearly here what youre seeing is a lot of investors are betting in the quarters and years ahead that apple is their think and well positioned to capitalize on some of the bigger tech trends whether thats 5g, Digital Health or wearables, guys. Josh, maybe now is the time to go to that play list apple bears greatest hits. Remember this one, apple cant innovate why didnt they come up with the amazon echo . Or how about what apple really needs to do is buy tesla and make elon musk the ceo werent those some interesting tunes . Yeah. So, those are some big hits, jon. You know, wearables is really interesting. I remember listening to people even on this very network who said tim cook was making a mistake when he launched into those wearables. Now when you talk about those wearables, apple certainly dominates that category. The last estimates i think i saw from research Something Like 30 share there. So pretty interesting take we often hear that as a criticism, of course, of cook. I think sometimes people bring up its method over magic. Of course magic is in the eyes of the beholder there, but cook has continued to innovate certainly talk about the smartwatch, talk about air pods and certainly some of those services, too, like apple music, jon. Yeah. Josh, i guess it took a little while for investors to see that magic certainly. The air pods i remember when they were being made fun of. There were pictures posted everywhere of people looking goofy if their air pods but now you see them absolutely everywhere apple shares have risen 10 this month alone thats just a huge gain. And i wonder if that stock split had something to do with it. I know that it didnt create any actual wealth, but psychologically, right, Retail Investors have been such a huge part of the stock market story this year. Apple, of course, and big tech have been a huge part of the story. I wonder if that stock split has pushed it over the threshold and the next question i suppose, guys, carl, is who gets there next i remember when apple hit the 1 trillion mark, we saw amazon, alphabet, follow, amazon is now at 1. 6 trillion market cap. Microsoft, 1. 6 trillion, alphabet just over 1 trillion and tech has really led this rally. Is it inevitable that the other ones follow since given their momentum so far this year, carl . Yeah. Its only 400 billion away from where apple is thats just a walmart plus a little, right . Exactly weve seen it happen in todays times, thats not really that much josh lipton, always great to watch this apple journey with you and look forward to seeing what interesting tunes the apple bearers will come up with next now that we hit 2 trillion, because clearly companys greatest days must be behind us, josh lipton. Thank you. Now, were going to bring in gene munster of loot ventures and roger mcnamy to talk about the overall market but of course this milestone for the biggest stock in the markets and that is apple. Gene munster, we never got that Apple Television that you were looking for, but we did get a 2 trillion market cap intraday your thoughts . Ill take the latter over the former i think thats whats important here is this concept that its jokingly you mentioned that its best days are behind it apple is actually view that its best days are still ahead of it. I know that that is a little bit difficult to wrap our head around given its current 2 trillion but, iput it this way, that there has been a fraction of the market, not just because of the pandemic but just over the last few years in terms of our dependence upon these types of products as we think about what is fair value. I think that is an important, critical topic with understanding why the stock can be 600 or better is that this still trades at a discount some of its same peers. And i think that as i kind of survey apples road ahead, im still optimistic because of this concept of a fiveyear acceleration i think related to whats going to be 5g. I think everything around health and wellness less than 10 of people who have iphones currently have an apple watch. I think that that is an opportunity. And then even beyond that whether its services or autonomy, albeit not a television but there are other product categories augmented reality. So i do not believe this will be a 4 trillion market cap in the next three years, to be clear, but i do believe there is a clear path to 600. Huh roger, you have been a player in and a watcher of Silicon Valley for quite a while. Apple is a unique story in that space. I cant help but note right now were almost a decade after the death of steve jobs, which means we spent almost as much time with apple after steve jobs as we did with apple post steve jobs return he returned in the late 90s and died in 2011 now were almost ten years past that point whats the significance you think of the company hitting this 2 trillion market cap after the founding ceo handed over the reigns to other management well, jon, i remember having some conversations with you on this very program about the issue of whether tim cook could fill the shoes of steve jobs and one of the conversations that we had was about the issue that tim cooks skill set better matched the postiphone apple than steves did if you sit there and think about what apple has become, which is this massive manufacturing, distribution and financial organization, those were skill sets that steve im sure would have done fine, but tim cook really is perfectly tuned it to. And i look at apple today as a real tribute to tim cooks strengths as an executive. And when i hear the complaints, and we talked a lot about the term innovation, which i think is widely misapplied in the context of technology, that apple the ways it has innovated but on business model, on distribution and things like that to me the great challenge that tim cook faces today is that the environment is changing underneath them. As it is for all technology companies. That all of a sudden we no longer can count on Global Markets being opened smooth everywhere around the world. And we have to be attentive to the probability that there will be regulations that there will be pushback of various kinds and then the market is simply, you know, i think right now not fully connected to the economy and there may be prices to pay there. And those, i think i agree with gene. I dont think apples issues right now are within its control. Almost all of them are external to the company so, gene, i want to ask you about the china risk here, of course, because you identified a lot of the innovation still ahead, perhaps the 5g phone, that Services Revenue which still has very good momentum, but this is a company that still gets about 80 of its revenue from china, from iphones built primarily in china are markets paying enough attention to this, particular if you think that while tensions are rising and china may retaliate, perhaps its just waiting to retaliate until after the election and apple is prime candidate there. I think on the manufacturing side its going to be relatively smooth the way i think about the china risk, its more about how much the percentage of revenue that comes from greater china, which is about 15 , 15. And so i do understand that the Global Environment is changing just in terms of manufacturing and apple will be making decisions in the years ahead about where theyre going to be making their products. I could foresee apple making more of their products in other countries undoubtedly. But do i see that as ultimately a risk, something that is going to short circuit this path that i see to 600 and beyond. And the answer is i dont. And the simple reason, i just feel that ultimately is that the Chinese Government has been supportive of apple surprisingly and weve been monitoring this since the trade dispute really may of last year and some of the tone and social media, which is heavily curated by the government has been heavily supported. Yes, there is some longer term supply Chain Companies that all Companies Including apple need to answer. I believe that it takes years sorry, gene not necessarily talking about supply chain issues but you said that the Chinese Government has been perhaps surprisingly accommodative for apple, but that was before the president threatened bans against some of their most important tech companies. Now taking aim at tiktok and potentially wechat so what im talking about more is does the Chinese Government retaliate by limiting, perhaps, apples access in china . So, we had a similar analogy a year ago with huawei and some of the bans going on and there was some anticipation as the u. S. Government banned huawei products there would be a retaliation against apple products we did not see that. And i the contours of this related to tiktok and even what ten cent and some of their affiliations with epic games, all that, all those contours are still to be determined but i think the precedence is that china does still largely see apple as a company that they want to support. And i do not believe that it is going to be anything that is going to disrupt the supply chain because of whats going on with tiktok. I would just add this, too, is that my experience and ive covered chinese internet companies, spent time there for five years, and my experience is that when things do go awry, it usually is several layers below the surface. It is some of these nuances that the Chinese Government puts into place that make it difficult to, for example, provision new factories or Little Things that you wouldnt necessarily see in the headlines. And those there is a chance that happens but i think that what we saw with huawei would suggest that were not going to see that Going Forward related to tiktok. Gene, thats an optimistic note roger, i wonder if you agree and i wonder if you think that if escalations were if relations were to wither, i guess, going into the final 80 days of the campaign, that it remains apple remains a Large Nuclear option should they want to go there . I think apple is unusually vulnerable and as you know, carl, i have been a huge fan of the stock for decades. And i have recently sold a significant portion of my position because it feels to me as though external factors, things beyond tim cooks control, now will determine the next, i dont know, 12 to 18 months for the stock i worry a lot about the markets just being detached from the economy. I worry aton in apples case about china. And i do think we have to pay very close attention to whats going on with epic games and the fight over the app store because essentially apple has, i would think, the least antitrust risk of the major tech platforms but it does have a real risk and the way it is handling it so far i think is at least politically speaking very fraught. And all those things make me very nervous i think apple can execute the business incredibly well here without investors getting paid because essentially weve been getting paid for so long that we shouldnt be surprised if the stock takes a pause here well, yeah. The register is ringing at 2 trillion right now, so some folks certainly have been getting paid roger, gene, thank you for being with us. Thank you, jon. This hour. Theres more going on than just apple stock movements theres a lot still ahead on squawk alley. Hey you, yeah you. I opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. I just discovered sofi, and im an investor with a diversified portfolio. Who am i . i refinanced my Student Loans with sofi because of their low Interest Rates. Thanks sofi for helping us get our money right. Welcome back to squawk alley. Lets turn now to retail as both target and lowes report bellow outresults were following the lead of home depot and walmart yesterday. Guys, good morning good morning. Hi, how are you oliver, i wonder if what were seeing in this period changes the kind of calculus around how investors look at Technology Investment. For a while it seems like amazon get a pass while investing in technology because investors believed it would lead to real growth but some other Companies Might get dinged when they were investing in it but now it seems thats critical for everybody. What were seeing here is the sbre gra integration of bricks and clicks target hit their numbers what stood out 195 ecommerce growth and using stores as hubs or fulfillment centers, drive up, curb side pickup and reinventing the purpose of the store to integrate the whole shopping journey whats happening is america really values convenience and target has done a great job being americas easiest place to shop and thinking about physical mixed with digital and instant gratification. Same day fulfillment is a big deal and customers want it all they want physical, they want digital and groceries and hard lines how they want it were also seeing this at Home Revolution with Home Electronics doing really well, too these are all key themes and as retail continues to evolve, this whole fulfillment and stores plus digital will continue to be a huge theme. Uhhuh. Michael, i want to continue pushing on this Technology Investment angle and how investors should think about it. I mean, the ecommerce acceleration that we saw in walmart, in target, home depot, lows. We just had ace hardware, it seems like perhaps these companies are establishing a track record of actually being able to get results out of these investments that theyre making despite whatever margin costs there might be might investors you think or should investors give them more of a multiple because of that . Well, yeah. And i think really the key is that ecommerce is no longer a bad word you think back a couple years ago if you mention ecommerce the idea is to short all retail. Took some of these retailers a while to understand the investments in technology that needed to be made, but theyve done it to olivers point, using the stores as assets instead of liabilities again f you go back maybe five years ago the idea was if you have a store youre in trouble these companies through their Technology Investments have proven thats not the case so, im not sure what it means specifically for multiples except that i do believe that investing in technology to drive your sales and your earnings is certainly the right thing to do for these companies. Oliver, it was interesting to hear oliver, it was interesting to hear mcmillens comments and then cornells comments about the mix of tail wind between stimulus dollars and simple share shift away from travel and leisure into retail i wonder do we take that to mean that target believes further stimulus packages are less direly need ord what did you make of that yeah. Its something were really watching because the stimulus in our view has had a strong impact of 3 to 5 or more as target speaks about it, part of their weakness was related to back to school and back to school will be a longer season. With a lot of uncertainty. So, the back to School Season and as we watch holiday was an area of cautious optimism for target walmart was a little more clear in terms of the stimulus and not having the stimulus impacting the performance lately so, those are things that were watching and stimulus interplays with unemployment as well as Consumer Confidence those are all factors that will really weigh on the consumer target has been our top pick its a top idea as well as walmart. We think theyre both great places to be in this uncertain environment. Were seeing a by furcation. On the other hand, kohls was down 20 , tough results. So what youre seeing is a transformation of retail with the malls and apparel retailers having a lot more problems but broadlines, home, grocery being key stocks to own. But thats something were watching, carl right the grocery angle has been key michael, i want to talk to you about some of the other retailers, the smaller ones. Of course the latest results have certainly highlighted that gap between big box and the smaller ones, more than 40 that have filed for bankruptcy this year but what do you make of say lululemon that had store closures yet shares are up more than 50 this year really have that technology piece figured out before the pandemic hit. Are there other companies out there that you think have done a good job with that that will emerge from this crisis stronger that arent the big box players . Well, certainly i think the bigger you are the better you are in this environment because it has enabled you to make those kinds of investments the new normal is going to be stay, play, learn and earn from home so again, i think you do need the omni channel assets to be able to do that. Retail is not dead i know thats been the call for a long time, but its more of a survival of the fittest in retail shakeouts theres really some small box retailers that are doing well. If i think about the smaller boxes, some of the auto parts retails, for instance, are doing well, grocery outlet, little of the smaller box relative to some walmart or target, doing very well but in general, i do think