Good afternoon! We have a one-on-one with Wedbush Analyst Dan Ives, who predicts Apple is heading for a $4 trillion valuation. He says 20 to 25% of the world’s consumers will access AI through an Apple device. Wall Street must have heard Dan loud and clear. Apple shares hit a new high and closed at $207.15 up 7% percent. Vista Energy plans to tap Argentina’s Vaca Muerta (it translates to dead cow) region to challenge U.S. shale oil producers. And Pimco warns of potential regional bank failures on the horizon.
📊Tuesday’s Performance
📱 1.5 Billion iPhones and 270 Million Need Replacing
Few analysts know Apple as well as Wedbush Securities Senior Equity and Research Analyst Dan Ives. He tells Supernews that Apple’s WWDC marks a historic moment for Apple and the entire tech industry. "I believe AI adds $30 to $40 per share to the Apple story," Ives said. He also emphasized the potential impact of this strategic move. He predicts that Apple is on the cusp of an AI-driven super cycle, with the iPhone playing a central role. He notes that of the 1.5 billion iPhones in circulation, 270 million have not been upgraded in over four years.
As Apple integrates AI capabilities into its upcoming iPhone 15 and iPhone 16 models, Ives expects a significant uptick in upgrades. "Unless you have the iPhone 15 or iPhone 16, you're not going to have access to Apple Intelligence," he explained. Adding that many users currently on iPhone 12, 13, or 14 models will likely upgrade to take advantage of these new features.
Ives says one of Apple's key strengths lies in its robust ecosystem, which boasts an impressive 99.3% user retention rate. Ives emphasized the importance of this, stating, "It ultimately becomes as important to the average person around the world as food and water." This loyalty, combined with the integration of AI, positions Apple for a "renaissance of growth," according to Ives. More from our one-on-one with Dan Ives.
🛢️Argentina’s Great Beef Wine and Oil
Argentina is known for its steaks and popular Malbec wines. Investors may want to add oil to their plate but not olive oil. The Vaca Muerta is about to become the Vaca Viva. Vista Energy plans to bring the region back to life and announced a significant expansion in the Vaca Muerta shale region, aiming to boost its output by 55% to 85,000 barrels per day by the fourth quarter of this year. This plan involves the introduction of a new fracking array from SLB, which will bring the company's total to two fracking crews in operation.
By 2026, Vista plans to start production on 138 new oil wells, targeting an output of 100,000 barrels per day. CEO Miguel Galuccio emphasized the company's commitment to growth through cutting-edge technology, a strategy that has seen Vista's New York-traded shares surge over 1,000% in the past three years. Despite a recent dip in US depositary receipts, the company's year-to-date advance remains strong at 48%.
🏦 Regional Banks on the Brink
Brace yourself! PIMCO's John Murray has issued a stark warning about the potential for widespread regional bank failures in the United States, driven by a high concentration of troubled commercial real estate (CRE) loans. With $441 billion in maturing property debt and rising interest rates, regional banks are facing significant financial strain. Unlike their larger counterparts, these banks lack diversified portfolios and robust risk management strategies, making them particularly vulnerable.
The Federal Reserve's uncertain monetary policy further complicates the situation, which has left property owners and lenders in a precarious position. Market experts, including Newmark's Howard Lutnick, predict that between 500 and 1,000 regional banks could fail by 2025-2026, underscoring the gravity of the crisis. As these banks grapple with distressed CRE loans, the ripple effects could impact various sectors, from real estate to retail, potentially stifling economic growth.
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