Apple CEO Exit Could Lower Revenue Bar After Downgrade
On Monday, much was made of the Jefferies Financial Group downgrade of Apple ($AAPL).
The New York-based investment bank cut its price target for Apple from $285.56 to $263.66. The cancellation of an all-glass 20th anniversary version of the iPhone was cited as among the reasons for the downgrade to a sell rating.
As a result, on a day that saw all the major indexes finish slightly in the red, Apple finished… slightly in the red, falling 1.62%.
Apple’s chart reveals a stock that is still forming higher highs (HH) and higher lows (HL). The stock continues to fluctuate near its 50-day moving average (blue).
Apple reached an all-time high just two weeks ago, and it is still up by 13.75% for the year. The stock fell from that all-time high because analysts were disappointed with the company’s revenue guidance. Apple sees revenue growth of 9% to 11% for the current quarter, lower than previous estimates.
Cook Out, Ternus In
Keep in mind that, in just three weeks, Apple will have a new CEO. John Ternus will take the helm on September 1.
This means that Tim Cook will step down after 15 years. In an age of outlandish and occasionally obnoxious CEOs, Cook has a reputation as a genuine, good guy.
What might an outgoing good-guy CEO do for his successor? He might just lower the bar on a key metric like revenue, making it easier for the company to meet future estimates.
That way, when Apple reports again in late October, Ternus can take a victory lap, instead of explaining what went wrong.
Next Stop, Palo Alto
Two years ago, we hopped on the train to Palo Alto (point A). For a long time, we sat on the train, waiting for it to move.
By March of this year, we were slightly in the red (point B). This was particularly discouraging since the Nasdaq gained over 20% in both 2024 and 2025.
In this case, patience paid off. Shares of Palo Alto Networks ($PANW) have more than doubled since the start of this year, gaining 112%. On Monday, the stock gained nearly 6% to close at an all-time high.
Palo Alto Earnings
Meanwhile, Palo Alto’s next earnings report is scheduled for September 1, just three weeks away. Analysts are looking for 98 cents per share, with revenue projected at $3.35 billion.
There have been several recent instances of tech stocks selling off after solid earnings, usually due to soft guidance. Recent examples include Sandisk ($SNDK) and Broadcom ($AVGO).
Risk Management
Since we’ve gained over 100% on Palo Alto, we can close half of our position now, and our remaining shares will still be worth more than our initial investment.
Why not close the entire position? Zooming in on Palo Alto’s daily chart, a breakout from a small cup or saucer pattern is visible (shaded yellow). That pattern suggests Palo Alto has additional upside.
By closing half of Palo Alto now, we can lock in a gain while remaining in the game. This continues our recent pattern of slowly lowering our exposure to tech and increasing our cash position.
At the time of publication, Ponsi was long AAPL, AVGO and PANW.
