Why Apple Silicon Is HUGE for the Stock
Apple's (AAPL) profit margins are about to go through the roof which is great for the stock.
Why?
Because of Apple M1 Silicon, including the M1X line, which should be announced at this October’s Mac event.
By using its own chips in its computers, Apple is going to save boatloads of cash.
Intel's gross margins are about 60%. In plain English, that means Intel keeps $60 for every $100 it takes in.
By using its own chips, Apple drastically reduces its cost of goods sold, simply because it's not paying that excess margin over to Intel.
Plus, Apple is obviously moving towards using the same chips and software across all its devices. That means its R&D and component engineering spend goes a hell of a lot further.
And... go on Apple.com and shop for M1 computers. You can't upgrade the memory... so you have to overpay Apple upfront. Instead of buying $50 worth of memory from Crucial, you pay $200 to Apple.
All that money falls right to Apple's bottom line.
That's why I'm so excited for Apple's upcoming Mac event, where it's expected to unveil the M1X line of Silicon.
If Apple keeps making performance gains, it's going to take even more market share from Windows PCs.
That means much higher margins on a much higher volume of computers.
If you think Apple is just about the iPhone, you are missing the boat.
Apple's Mac business is going to get ridiculously profitable.
And yes, Apple is my biggest stock position and I have zero intention of selling.