👁️ There’s no AI in Apple

Once again, it appears Apple’s relatively limited exposure to AI, while not quite an asset, isn’t the demerit it could be. Even as the company has increased its capital spending to build out its AI capabilities, that spending still pales in comparison to its peers.

• While not exactly riding high amid the broad tech and AI sell-off, Apple has the distinction among its Big Tech peers of having mostly maintained its stock price this month, while most others, including Microsoft, Amazon, Google, and Meta, have gone into the negative.

• Combined, those four giants in particular have spent nearly $100 billion on purchases of property and equipment last quarter alone. 

• Apple, which has largely failed to deliver the AI iPhone features it promised more than a year ago, spent a miserly $3 billion last quarter. And at the company’s most recent iPhone event, mentions of AI were mostly MIA.

Apple is still trying to up its AI game, but it’s doing so with the help of Google’s Gemini, paying it $1 billion a year to use the model on its iPhones. Similarly, Apple is continuing with its hybrid data center model, where it uses both its own data centers and third-party capacity as a way to rein in its own spending.

As a result, Apple, unlike everyone else, has mostly been able to avoid persistent questions about massive AI spending and how exactly it’s going to pay off.

The Takeaway

One is reminded of the fable of the zen master. In this telling, Apple is right out of the gate to build an AI assistant called Siri, and investors think it’s wonderful, but the zen master says, “We’ll see.” A few years later, Siri has failed to meaningfully move the needle and investors think that’s terrible, but the zen master says, “We’ll see.” So Apple doubles down on Siri at the onset of the AI boom and investors think it’s wonderful, but the zen master says, “We’ll see.” And then it turns out that Siri can’t remotely compete and investors think that’s terrible, but the zen master says, “We’ll see.”

But now there’s a sell-off in anything touching AI! And investors, they think Apple’s wonderful! 

Ah, but what does the zen master say?

Read more

• Bitcoin plummets to its lowest price since May as “extreme fear” hits: Last week was rough for crypto, with bitcoin ETFs suffering their second-largest outflows on record Thursday and dropping below the $95,000 mark on Friday, a roughly 24% drop from its all-time high on October 16. Even with the decline in price, bitcoin treasury firms’ share prices have been falling even faster, with many top-tier firms — even Strategy! — seeing their market caps drop below the value of their stockpiles. Experts we talked to varied on their predictions of what’s next for bitcoin, but we agree that “traders would do well to stay on their toes.”

• Speculative stocks’ wild ride: The volatility last week was pretty insane for some high-beta momentum stocks. The basket has tanked over the past month, and it looked like the trend would continue Friday morning… until things completely reversed. Why? The same uncertainties that the market was facing Thursday — doubts about further rate hikes, confusion about the state of the economy, jitters about the potential for the AI boom to turn into a bust — haven’t changed, but perhaps retail traders finally came back for a bite of that tasty dip?

How Beyond Meat’s refinancing efforts have gone

Beyond Meat eliminated about $800 million in debt and all it got in exchange was a massive decline in its stock price, a longer runway to make processed peas into faux meat, and an entertaining story.

Read the whole saga

• 🏎️ F1: This week, the racing world is convening on Las Vegas ahead of the Las Vegas Grand Prix on Saturday. Max Verstappen is seen as the man to beat, with the markets pricing him as the favorite, with around a one-in-three shot of victory. 

• 📊 Unemployment/Fed: November has seen a sharp change in expectations for the Fed decision in December: the 25-basis point cut that as recently as late October had had a 90% chance has now fallen to a 45% chance, with the likeliest outcome thought to be that the Fed maintains the rate. 

• 🏈 NFL: The Dallas Cowboys take on the Las Vegas Raiders tonight for Monday Night Football. Though the Cowboys are somewhat anemic, at 3-5-1, the Raiders are straight up terrible this year, and Dallas has a 64% of winning, according to the markets.

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

• Walmart’s CEO of more than a decade stepped down on Friday ahead of this week’s earnings report

• Micron shareholders loved reading a report that Samsung hiked memory chip prices by as much as 60%

• The fascinating story behind why two mountain peaks became one of the internet’s most famous images