Conflicting reports on the foldable iPhone show the value of our Apple mantra
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Wall Street pulled back Tuesday as President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz — or face potential strikes on key infrastructure — draws closer. By midday, the S & P 500’s decline largely unwound Monday’s gains, a reasonable move given how difficult it is to game out the Trump administration’s next steps. Oil remained higher in the session, with U.S. oil benchmark West Texas Intermediate crude up about $3 to $115 per barrel. Bonds yields moved up, with the 10-Year yield up roughly 2 basis points. Our strategy to navigate this uncertain moment: We’re sitting on our hands Tuesday, reluctant to deploy new money on concerns that an escalation in the war would lead to an immediate pullback in whatever we buy. And if cooler heads prevail, we should capture that upside across the 31 stocks in the portfolio. Apple shares dropped as much as 5% in Tuesday’s session on a report that its upcoming foldable iPhone may be facing delays, but new information suggests that story was wrong. Accordingly, the stock is well off its lows of the day in afternoon trading. Earlier Tuesday, Nikkei Asia reported that the iPhone maker experienced a setback in the engineering test phase, which could push back its production and shipment timeline by several months. The Nikkei story was later refuted by Bloomberg, which reported the foldable iPhone model is still on track for a September launch, citing people with knowledge of the matter. The market is very excited that Apple is coming out with a foldable smartphone, explaining the initial emotional reaction in the stock. We’re also quite bullish about the new device. People don’t get too excited by camera upgrades anymore. To unlock a major upgrade cycle, Apple needs to deliver on new AI powered features or develop a new form factor. A larger, foldable screen should create a lot of buzz. Plus, Apple can charge more for a foldable phone. Consumer demand for a foldable iPhone was backed by a recent Morgan Stanley survey, which showed that global interest in buying one was high. In a note to clients on March 22, Morgan Stanley said its survey found 27% of global iPhone owners are “extremely interested” in a foldable version. In China specifically, that number was 40%, according to Morgan Stanley. When it comes to Apple, our longstanding “own it, don’t trade it” thesis was built for moments like what happened Tuesday. It’s our guiding light to ensure we don’t read too far into the dreaded “supply chain analysis” reports that come out every iPhone cycle. Instead of trading Apple on every (and often conflicting) headline, our preference is to own it through the noise and let the company do the talking. You would have missed big gains if you flipped in and out of the stock and didn’t get back in. Owning Apple, and not trading it, has been the winning strategy that Jim Cramer’s Charitable Trust has had with Apple for more than 10 years, and we’re not changing it anytime soon. Levi Strauss reports after the closing bell on Tuesday, and then we’ll hear from Delta Air Lines before the opening bell Wednesday. On the data side, we’ll see the February PCE Price Index report and the third read on fourth quarter GDP (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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