AAPL is overvalued relative to history (33x vs 24x) and faces short-term downside risk from product launch event dynamics despite positive long-term strategic shifts under new leadership.

Nvidia, Apple, Alphabet, and Microsoft are under pressure, weighing down the market even as the Nasdaq 100 nears breakeven. But I want to focus on Apple, as it is the subject of today's "Inside Out" segment.

Let's take a look inside Apple and anticipate today's "surprise and shine" event.

We will learn more about what Apple will reveal. But listen, you have to realize that leaks sometimes happen in the market , so we're expecting what will be released from the iPhone 18 Pro, the Pro Max version, and the foldable phone, "Ultra".

There is new technology in wearable devices such as watches, AirPods, and others.

So it should be a good day, especially since we are talking about a period of no more than 8 or 9 days since the new CEO, John Ternos, took office. This is extremely exciting.

That's exactly what I was going to ask you, Josh, which is that for the first time in almost a decade, or a little more , we're looking at Apple and wondering, "What's next?" As you know, we have a new leader at the helm of the company, and his role may be quite different from what Tim Cook played for this company.

Based on your assessment, and I know it's only been a week or two and it's impossible to be certain, but what is your general feeling about Ternos and the direction it might take Apple in ?

Listen, Ternos has been with this company for a very long time, almost 25 years. He was there during Steve Jobs' time and was part of the transition to Tim Cook. Tim Cook is considered one of his most important mentors in this field, and we must not forget that Tim Cook is still very active in these businesses, so he has not completely relinquished control .

But here's what I like about this transformation. This is a scenario in which Tim Cook appears as an expert in supply chains and operations. Don't misunderstand me, he was extremely successful as a CEO and created tremendous value for shareholders.

Um, but now we move on to someone who is a product man and hardware engineer.

So, I think this indicates something that reduces the focus on artificial intelligence that worries many in the Apple world, and focuses more on sticking to our foundation, which is the hardware approach we take.

So, look forward to things like biointegration. Ah, and I mentioned this before in one of your other paragraphs, which is, you know, blood sugar monitoring . They are even working on an acquisition deal for a company called Sonera Magnetics, which owns microchip-based brain technology that can actually review things like health, emotions, and cognition.

So I really think this is the direction Apple is heading. Of course, there will be some AI needs in the background , but will that be their primary bet going forward? It really wasn't like that at any time, and I don't think it needs to be while they continue.

Josh, as we connect these things, it all makes perfect sense, does n't it? It seems that all major companies are racing and trying to outdo each other in spending on research and development.

They didn't ask a question like, "How will we deliver this technology to the consumer?" Apple seems to have said, "Okay, we'll do it then." " We will be your devices." Nations, but nevertheless, they will certainly integrate this into services, and whether they will outsource this to companies like Anthropic or build it internally, is still to be seen .

But they have other things to manage , and those relate to the supply chain. We know that memory costs have skyrocketed. The tariffs were a subject of discussion, and whether they would move manufacturing locally was also a subject of discussion.

Will this be the biggest question now in the next two years? To a lesser extent, how will Apple spend on artificial intelligence, and to a greater extent, how will they maintain their profit margins in this volatile manufacturing cost environment?

Yes, great. Because it's one of those things that I think every company thinks about, but you also have to realize that this is Tim Cook's specialty. Therefore, I think he will continue to focus on this matter.

Certainly, there are geopolitical issues and risks that play a role in this matter. China has long been a major supplier to Apple, but it has already begun to diversify its sources.

So now you see a lot of production coming from India , and it is actually spreading more and more around the world to ensure that there is not a single obstacle to Apple's ability to continue to give as an organization, and that is in the works .

It is something they have been paying attention to for a very long time, and they already have experts in this field working on addressing it.

One last thing to mention here is that you cannot forget Tim Cook’s effective role, not only in a little political lobbying, but also in getting temporary tariff exemptions from the Trump administration, which are still in place, which is another indication that they know what they are doing in this regard.

Yes, it appears to be higher now than it was before the earnings announcement, and this seems to be a potential market driver. But historically, this type of event risk, which relies on "buying the rumor and selling the news," often occurs when new products are launched.

We usually see a decline , but the stock is still only 7% below those record levels. So, we are at high levels.

Futures-based valuations are about 33 times earnings, right? Compared to the historical 10-year average of approximately 24 times the earnings. The ratings are high, but their profits in the last few quarters have been very good. So, take that into consideration.

The foldable phone is expected to be released soon. What will the cost of the new phones be based on the increased prices of memory chips and components? What kind of impact will this have on sales?

So, you looked at a passive (indirect) strategy, right? You can still take a specific approach here, Alex, without being aggressive. I looked at something neutral towards my downward trend.

If the stock price declines, or even if the stock price rises slightly, you will still have a safety margin before you start incurring losses. This deal is in September options which expire on September 18.

That is, 9 days remain until the expiry date. So, you're giving yourself a little time in this deal. We will sell a call option outside the price range at 322.5, and to limit the risk, we will buy a call option at 332.5.

So, it is a vertical sell order for a $10 call option, and it ranges between neutral and bearish. You will receive a credit balance of approximately $2.30 . This is the price at which it was trading earlier.

It might be slightly less than that. But the credit you receive is what you can earn, isn't it? If you can earn $230 with a risk of $770, the risk is greater than the reward, but you have a better chance of success in this type of trade.

There is a 72% probability that the put option sold at 322.5 will be out of price range at expiry. The idea here is that you sell this option, and if it ends up being worthless, you keep the credit you collected.

You can do this as a speculative trade, or if you are a long- term shareholder in Apple, this can also serve as a hedging tool. But you are benefiting from those high implied volatility levels, Alex, and you have a safety margin of 3.5% to 4% up to the breakeven point at around 324.80.