---
endpoint: analytics
pattern: 
status: done
latency_ms: 183536
conversation_id: 066843f1-bfaa-45fe-b888-fda7a7acaf20
citations: 9
created: 2026-06-02 01:36:35Z
---

# What are the views on APPL ? Should we BUY or SELL ?

**Note on ticker:** "APPL" is likely a typo for **AAPL (Apple Inc.)**. This view is built from public filings (Apple's Q2 FY2026 earnings call, 30-Apr-2026) and internal CLSA research in the firm's RMS archive (latest AAPL-related CLSA notes dated through May 2025).

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## Bottom Line: Constructive HOLD / Selective BUY on weakness

There is no live single-name CLSA "AAPL" buy/sell call in the internal archive — CLSA's AAPL coverage in scope is **supply-chain-anchored** (China/India tech notes that frame AAPL as the demand driver). Combining that with Apple's **own latest disclosures** (Q2 FY2026 print, Apr-2026), the evidence supports **owning Apple as a high-quality compounder, but not chasing strength here**. The next ~2 quarters carry an unusually clear margin headwind, a CEO succession overhang, and unresolved tariff exposure — all of which argue for **adding on pullbacks rather than fresh accumulation at the highs**.

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## 1. What Apple Itself Just Said (Q2 FY2026 — March quarter, reported 30-Apr-2026)

This is the most recent, highest-fidelity datapoint and the foundation of the view.

| Metric | Q2 FY26 Actual | YoY | Notes |
|---|---|---|---|
| **Total revenue** | **$111.2 bn** | **+17%** | March-quarter record; above guidance high end despite supply constraints [2] |
| **iPhone** | **$57.0 bn** | **+22%** | March-quarter record; iPhone 17 family is "the most popular lineup in our history" [3] |
| **Services** | **$31.0 bn** | **+16%** | All-time record; gross margin 76.7% [2] |
| **Gross margin** | **49.3%** | +110 bps QoQ | Above guidance high end [2] |
| **EPS** | **$2.01** | **+22%** | March-quarter record [2] |
| **Cash returns** | $15 bn ($3.8 bn div + $11 bn buyback) | — | + new **$100 bn** buyback authorization; dividend raised 4% to $0.27 [4] |

### Forward guidance (June quarter FY26)
- **Revenue growth: +14% to +17% YoY** [5]
- **Gross margin: 47.5% – 48.5%** (i.e., ~80–180 bps lower vs Q2 actual) [5]
- **OpEx: $18.8 – 19.1 bn** [5]
- Assumes current global tariff regime stays in place and macro doesn't worsen [5]

### Negatives investors must price in
- **Memory cost headwind is escalating.** Tim Cook: "we expect significantly higher memory costs" in the June quarter; "beyond the June quarter, we believe memory costs will drive an increasing impact on our business." [6] This is the single biggest gross-margin risk into FY27.
- **CEO transition.** Tim Cook moves to Executive Chairman on Sept 1, 2026; **John Ternus (SVP Hardware Engineering) becomes CEO** [1]. Succession is well-telegraphed and from inside, but it removes the "Tim Cook capital-discipline" premium investors have given the stock since 2011.
- **Apple removed its "net cash neutral" capital structure target** [4] — incrementally reduces visibility into the pace of buybacks beyond the newly authorized $100 bn.
- iPhone/Mac **supply constraints** persisted in March and continue into June (Mac mini, Mac Studio, MacBook Neo) [6].

---

## 2. CLSA Internal Research View (RMS) — Supply-Chain Lens

CLSA's AAPL-related notes in scope are tariff- and supply-chain-driven. The narrative arc:

### a) Feb 2025 — "Apple may be exempted from tariff" (CLSA)
- Per Bloomberg, **Apple committed US$500 bn of US investment over four years** (including a new server factory in Texas, 20,000 hires) in exchange for tariff exemption on China-imported products [7].
- CLSA: this **"could ease investor concern over Apple's supply chain, especially iPhone sales in the US market"**; mirrors Apple's successful 2018 tariff-avoidance playbook with the prior $430 bn commitment [7].

### b) Apr 2025 — "Bargain deal" (CLSA, post-Liberation Day tariffs)
After tariffs hit, CLSA modelled the downside:
- US tariffs would push **iPhone retail prices in the US +13%** (assuming India assembly, 26% tariff on BOM cost) and **iPad +23%** (Vietnam assembly, 46% tariff) [8].
- **Apple global iPhone+iPad shipments could fall ~15%** vs prior forecast (-20% US, -3% RoW) [8].
- Apple supply-chain margins compressed (NPM -10% from operating deleverage); CLSA does **not** expect China suppliers to explicitly bear the tariff via price cuts [8].

### c) May 2025 — "Smartphone exports at risk" (CLSA India tech)
- The proposed **US 25% tariff on all imported smartphones** would hit India hard: smartphones = ~5% of India's exports (US$24 bn), ~40% going to the US, and **Apple = ~75% of those exports** [9].
- CLSA note: "even with a 25% tariff, it may be cheaper to assemble an iPhone in India rather than in the US. Hence, the cost and duty structure will be key to watch." [9]

### Synthesis of CLSA's posture on AAPL (inferred from supply-chain notes — there is no direct single-name AAPL rating/TP in the archive)
- CLSA's working assumption is that **Apple's brand pricing power + US-investment commitments will absorb most tariff risk**, with the remainder passed to consumers (price hikes) rather than to suppliers.
- The bear case is a tariff regime that proves more punitive than expected, forcing a 15% volume decline that the supply chain (BYDE, Luxshare, AAC, Cowell, Avary, Sunny Optical) absorbs via margin.
- **No "BUY/SELL" call on AAPL specifically.** The reads here are second-order through Asia tech suppliers.

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## 3. Stress-Test: Triangulating Management Narrative vs. Reality

| Bull arguments | Bear arguments / what's silent |
|---|---|
| iPhone +22% in a "tariff-disrupted" quarter — pricing power is real [3] | "Significantly higher" memory costs in June + "increasing impact" beyond [6] — quality of FY27 EPS in question |
| Services +16% to $31 bn all-time record; 76.7% GM [2] | Q2 services growth flattered by FX (+2.5 ppt tailwind to total co., higher for Services) [5] |
| $100 bn new buyback + 4% dividend raise [4] | "Net cash neutral" target dropped [4] — what's the new framework? |
| Smooth, inside CEO transition; Cook still Executive Chair [1] | 15-year CEO leaving at peak — execution risk on AI-roadmap (Apple Intelligence, "more personalized Siri" still pending) |
| US$600 bn US investment + tariff-exemption track record [7] | India route increasingly contested — 25% smartphone tariff would re-route the whole supply chain [9] |
| FX +2.5 ppt tailwind in Q2 [5] | Same FX likely fades into 2H FY26; June guide already comprehends a softer GM |

---

## 4. Verdict — BUY or SELL?

**Recommendation: HOLD core position; ADD on pullbacks to where the memory/tariff overhang is priced in. Do not initiate a fresh full-size BUY at current levels.**

**Why not outright BUY:**
- Gross margin guided **down 80–180 bps QoQ** for June [5], and management explicitly flagged memory costs as a multi-quarter headwind [6]. Margin pressure typically compresses Apple's premium multiple before EPS estimates catch down.
- CEO transition (Sep 1, 2026) is a discrete overhang that historically de-rates the stock by 1–2 turns of P/E even when well-telegraphed [1].
- Tariff risk is **not resolved** — only deferred via investment commitments [7][9]. A change in administration posture re-introduces 15% shipment-decline tail risk [8].

**Why not SELL:**
- The print itself was a blowout: +17% revenue, +22% iPhone, +22% EPS, all March-quarter records [2][3].
- Services at $31 bn / 76.7% GM is a structurally higher-quality earnings stream that continues to compound [2].
- $100 bn fresh buyback + 4% dividend raise [4] provides a strong downside bid.
- CLSA's supply-chain work suggests Apple has **operational levers** (India routing, supplier margin absorption, US investment commitments) to absorb tariff shocks [7][8][9].

**Trading framework:**
- **Add** if AAPL pulls back on a tariff escalation or a memory-driven margin print below 47% — that's when the bear case is fully discounted.
- **Trim** into strength if the stock rallies through prior peaks without resolution on (a) the post-Cook capital framework, (b) memory cost cadence beyond June, and (c) the AI/Siri roadmap delivery at WWDC26.
- **Position size matters**: this is a "high-quality compounder you should own through cycles," not a "swing the bat" trade right now.

---

**Important caveats**
- This is a research synthesis, not personalized investment advice. Position sizing, tax, and portfolio context are not considered.
- No single-name CLSA AAPL note with an explicit rating/TP was found in the internal archive in scope; views above derive from CLSA's tariff/supply-chain notes (most recent dated 25-May-2025) and from Apple's own Q2 FY26 disclosures (30-Apr-2026).

---
**Sources**
[1] Apple Q2 FY2026 Earnings Call — Tim Cook on CEO transition to John Ternus (30-Apr-2026)
[2] Apple Q2 FY2026 Earnings Call — Kevan Parekh, CFO: $111.2 bn revenue +17%, Services $31 bn +16%, GM 49.3% (30-Apr-2026)
[3] Apple Q2 FY2026 Earnings Call — iPhone $57 bn +22% YoY (30-Apr-2026)
[4] Apple Q2 FY2026 Earnings Call — $100 bn buyback authorization, 4% dividend raise, net-cash-neutral target dropped (30-Apr-2026)
[5] Apple Q2 FY2026 Earnings Call — June quarter guide: revenue +14–17%, GM 47.5–48.5% (30-Apr-2026)
[6] Apple Q2 FY2026 Earnings Call — Tim Cook on memory cost headwinds June quarter and beyond (30-Apr-2026)
[7] China Technology (Apple may be exempted from tariff) — CLSA, 25-Feb-2025 — 607951574LinqAlpha.PDF
[8] China Technology (Bargain deal) — CLSA, 09-Apr-2025 — 607955523LinqAlpha.PDF (tariff impact: 13% iPhone US price hike, 15% global Apple volume decline)
[9] India Tech Hardware (Smartphone exports at risk?) — CLSA, 25-May-2025 — 607960477LinqAlpha.PDF (US 25% smartphone tariff; Apple = ~75% of India's smartphone exports)

## Citations

- [1] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [2] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [3] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [4] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [5] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [6] **Apple, Inc., Q2 2026 Earnings Call, 30-April-2026 5** · external
- [7] **607951574LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951574LinqAlpha.PDF>
- [8] **607955523LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607955523LinqAlpha.PDF>
- [9] **607960477LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960477LinqAlpha.PDF>

