Dan Ives Talks Apple, Palantir, Tech Earnings

Apple

Across the shows: 36 speakers in other episodes, 27 bullish and 29 bearish calls, past 30 days

• Dan Ives · Yorkville Ives & Co.Bullish

  Apple's profitability is not threatened; free cash flow potential is rising over the next 4-8 quarters.

  Ives argues that once near-term headwinds such as memory costs are set aside, Apple's profitability is actually increasing. He looks out over the next four to eight quarters and expects free cash flow potential to rise. Tom Keene adds that modeled free cash flow for 2027 into 2028 is almost triple the pre-COVID level, which Ives builds on.

  “No. I... To some extent, their profitability, when you take away some of these near term things on memory... It's actually increasing... When you look out over the next four, six, eight quarters, their free cash flow potential... is actually increasing.”at 3:49

• Dan Ives · Yorkville Ives & Co.Bullish

  Apple's AI strategy is genius: it spends little on AI while its installed base keeps growing.

  Ives calls Apple's AI approach genius. Apple has been able to spend very little on AI, the installed base has kept increasing, and the upgrade cycle has played out. He says the company is now at 'go time' with Gemini. He expects that about 20% of the world will access AI through an Apple device, which he sees as the opportunity and challenge for the new CEO.

  “I think it's genius because to some extent, they... they've been able to navigate this, basically spend very little when it comes to AI. The install base has continued to increase.”at 4:30

• Dan Ives · Yorkville Ives & Co.Bullish

  AI will add about 15% of Apple services revenue, worth roughly $75 per share incremental value.

  Ives expects AI to show up in Apple's services business. He estimates that about 15% of services revenue will come from AI over the coming years, which he says is his firm's view. That adds about $75 per share of incremental value from AI alone. He also argues developers will build AI apps and features within the Apple ecosystem, and Apple will monetize them, making AI upside on top of the base story.

  “I think about 15% of services over the coming years will be AI, which is our view, $75 per share incremental to the story just from an AI perspective.”at 5:26

• Dan Ives · Yorkville Ives & Co.Bullish

  Apple's services business is worth $150-$175 per share; value it on a sum-of-the-parts basis.

  Ives values Apple on a sum-of-the-parts basis, not a headline P/E multiple, which he calls the wrong way to view it. Services carry margins around 85-90% and run at roughly double the hardware margin, so the profit goes straight to the bottom line. On that basis he values services at $150 to $175 per share, and says institutional investors view it this way. He has held this view on the Apple story for a long time.

  “I mean, I view the sum of the parts services, it's worth $150 to $175 per share.”at 7:51

Palantir Technologies

Across the shows: 10 speakers in other episodes, 8 bullish and 2 bearish calls, past 30 days

• Dan Ives · Yorkville Ives & Co.Bullish

  Palantir's commercial business is off the charts, showing enterprises are lining up for AI use cases.

  Ives says Palantir's commercial business is the best barometer of what enterprises are doing, and that it is 'off the charts'. He sees the stock sell-off after earnings as a knee-jerk reaction in a jittery market. He argues that Palantir combined with hyperscaler capex shows enterprises are lining up for AI use cases.

  “There is no better barometer in terms of what enterprise are doing than their commercial business... it's off the charts.”at 8:44

AI infrastructure & data centers

• Dan Ives · Yorkville Ives & Co.

  Hyperscaler AI capex is a storm big players will weather; free cash flow turns parabolic in 2027-2029.

  Ives argues that cutting AI capex would leave companies behind. He points to the capital raised by Oracle, Microsoft and Meta, and says the backlog is in the trillions of dollars. He concedes some neoclouds could fail, but for large-cap hyperscalers he sees the spending as a storm they will get through. On the other side, he expects free cash flow to become parabolic in the second half of 2027, 2028 and 2029.

  “Because everyone recognizes the backlog is trillions of dollars... this is viewed as basically a storm that they will get through... as you go into second half twenty seven, twenty eight, twenty nine will be parabolic”at 6:38

IPOs, M&A & deal activity

• Dan Ives · Yorkville Ives & Co.

  Tech M&A and capital raises will keep bankers busy, with a generational run over the next two years.

  Ives expects Wall Street bankers to stay busy because of M&A and capital raises across the market. He cites Marvell's large tech deal, announced the day before, as an example of the M&A activity. He says the opportunity in tech over the next two years will be almost generational. He argues this will keep hiring significant as well.

  “Because the reality is from M&A to capital raises... it will almost be generational next two years when it comes to... what's happening in tech.”at 9:39