Expect a strong next 12 months from Apple, says Deepwater's Gene Munster
Speakers
Gene Munster
— Managing Partner, Deepwater Asset Management
Summary
Gene Munster, Deepwater Asset Management managing partner, lays out a bullish thesis on Apple, arguing the stock is undervalued and poised for a strong year ahead due to a shifted iPhone upgrade cycle and eventual AI-driven hardware boom. He also flags Google’s brain drain as a growing threat to its AI competitiveness.
- Apple shares are undervalued, with a strong 12‑month outlook.
- September quarter guidance was better than perceived after adjusting for FX and inventory effects.
- A shift in the iPhone upgrade cycle will spread revenue boosts across multiple quarters.
- Personalized AI will ignite a major consumer hardware upgrade cycle starting mid‑to‑late 2027, with Apple a primary beneficiary.
- Higher iPhone prices will keep margins stable despite rising memory costs.
- Google is suffering a brain drain with six key AI departures in three months.
- Gemini’s AI performance is slipping, raising doubts about Google’s ability to stay competitive.
- Gene Munster is bullish on Apple, cautious/avoid on Google.
Ideas
Apple undervalued, strong upgrade cycle ahead.
Apple shares are undervalued and will have a strong next 12 months. The September quarter guidance, though below Street at 9‑11% growth, was actually better when adjusted for FX headwinds and an inventory dynamic. A shifted iPhone upgrade cycle will move part of the lower‑end volume to March/June 2026, raising total sales. A massive consumer hardware upgrade cycle driven by personalized AI is expected to start mid‑to‑late 2027, with Apple a key beneficiary. Higher iPhone prices (~15% increase, about $125) will be absorbed by subscription buyers, keeping margins stable despite higher memory costs.
Google brain drain threatens AI edge.
Google is experiencing a critical brain drain, with about six major AI departures over the last three months. This reflects a culture problem that is starting to show in AI model rankings – Gemini is slipping relative to GPT and Grok is improving. The trend is not positive, and there is no good explanation to make investors comfortable about Google’s progress in the AI race.
Up Next
This CNBC video, published August 10, 2026, features Gene Munster discussing AAPL, GOOGL. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Gene Munster · Tickers: AAPL, GOOGL