Key Points
Apple CEO Tim Cook is set to step down on September 1, 2023, transitioning leadership to John Ternus, who will inherit a challenging situation characterized by rising commodity prices, particularly in memory chips. Cook described the current state of memory chip prices as experiencing a “100-year flood,” indicating severe unforeseen market conditions.
During the last earnings call, Cook mentioned that Apple has already raised prices on some products and may need to do so again if memory prices persist. Currently, Apple is trading at 35 times earnings, reflecting a lack of expected growth, especially in contrast to the S&P 500’s multiple of 25.2 times trailing earnings. The implications of these rising costs could present a significant challenge for Ternus early in his tenure.
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