AI & Apple: A Matter of Principle

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Okay, so, Apple. $3.1 trillion. Fine. It’s a lot of money. Everyone agrees. But to assume it’s some immutable force? That’s just… presumptuous. The hubris of it all. I’m telling you, two companies – and it *irritates* me how casually people throw around “AI stocks” – are going to surpass it. Not Nvidia, alright? Everyone’s on the Nvidia bandwagon. It’s so predictable. It’s like, can we think for *one* second? It’s Meta and Broadcom. And let me explain why, because clearly someone needs to.

Now, if these predictions come to fruition, for the shareholders, it’s… fine. I guess. It’s fine for them. But it’s about the principle of the thing.

  • Meta, currently at $1.7 trillion, has to climb 88% to hit $3.2 trillion. That translates to a yearly gain of 13.5%. Not exorbitant. But, frankly, can they consistently do that? That’s the question.
  • Broadcom, at $1.4 trillion. They’ve got a steeper hill to climb, 129%. An 18% annual return. See, *that’s* pushing it. That’s asking a lot. And these analysts just toss these numbers around, like it’s nothing.

I have… certain convictions about this. Let me lay them out, because I’m starting to get worked up about it.

1. Meta Platforms

Meta owns Facebook, Instagram, WhatsApp. Three of the four biggest. It’s a monopoly, practically. And people just accept it! They’re all posting pictures of their lunch. And Meta’s collecting data. It’s… efficient, I suppose. And that efficiency translates to advertising revenue. They are the second biggest ad tech company, behind Google. Which, incidentally, still has a slightly superior user interface, if you want my opinion, and nobody ever asks.

They’re using AI to show you slightly more compelling cat videos. It’s cynical, but effective. Zuckerberg said engagement is up. Six and seven percent. Six and seven! Is that all? It seems low. But, apparently, people are spending slightly longer scrolling aimlessly through infinite content. Amazing. And they’re letting advertisers use AI to make ads even *more* annoying. It’s a vicious cycle.

And then there are smart glasses. Zuckerberg is convinced they’ll replace smartphones? Honestly. It’s preposterous. Who wants a computer strapped to their face all day? It’s anti-social! Plus, what happens when the battery dies? You’re just…stuck. Socially awkward and technologically impotent. It’s a nightmare scenario.

The analysts say Meta’s earnings will grow 15% annually. Okay. Fine. A 27 times earnings multiple? Okay, *maybe* reasonable. If they hit 15% for the next few years, they *could* get to $3.2 trillion, with the multiple dropping to 25.5. It’s entirely plausible. Which, frankly, is terrifying.

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2. Broadcom

Broadcom makes chips. Wi-Fi chips. Ethernet chips. Things you don’t think about, but are absolutely essential. And they’re the market leader in both? It’s almost unfair. These guys are the plumbing of the digital world. Nobody appreciates the plumbing. They just expect the water to flow. And now, AI needs lots of plumbing. So, *of course* Broadcom benefits.

They’re building custom AI chips for everyone: Apple, Google, even ByteDance. Seven hyperscale clients. Seven! And they get credit for it? No. Morgan Stanley says the market for these chips will grow 34% annually. 34%! Good for them. But I bet it won’t be 34%. It’ll be 32, maybe 31. Something like that. A slight underperformance. It always happens.

Earnings are expected to grow at 20% annually. Okay. The valuation is 52 times adjusted earnings, which is… a lot. It’s a lot. But it could drop to 47 if they actually hit that growth rate. They’ve beaten earnings estimates six quarters in a row. That’s… something. It means Wall Street is consistently underestimating them. Which is just sloppy analysis, frankly. And management says AI chip revenue could quadruple by 2027? Alright, now you’re just showing off.

Look, Broadcom surpassing Apple is a harder sell. It will require more…effort. But it’s *possible*. It’s a distinct possibility. And I’m telling you, a lot can happen in five years. A lot of very irritating things.

Frankly, it all just feels a bit… off. 🙄

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2025-08-01 11:32