Breakfast News: Apple’s New Year Evolution
January 6, 2025
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Source: Image created by JesterAI.
1. What’s Anticipated From Apple This Year?
The 2025 Apple (AAPL -1.14%) rumor season is getting started, as various sources say we should see 20 or more new products this year from the Hidden Gems rec. While services revenue ought to remain as the core growth driver, we could have a MacBook based on the latest M4 chip as early as this month, with the iPhone 17 and maybe a new Apple Watch on the cards.
- “Anyone want to walk across the room to use a different screen?”: Fool analyst Seth Jayson isn’t yet convinced by rumors of the ‘Command Center’, a small, wall-mounted tablet that will “show the temperature when you're far away and more detail as you get closer, like security camera footage and thermostat… And they expect to sell multiple units per home?”
- Foreign phone sales in China fell 47% in November: Investors will seek updates on product sales in China, where Apple is the biggest international mobile vendor, after a year-over-year sales decline.
2. Microsoft to Spend Big on AI
The 2025 AI outlook just got a boost from Microsoft’s (MSFT -1.28%) plans to plow around $80 billion into AI data centers in 2025, raising its capital expenditure for the year. Announced in a blog post on Friday, a lot of the cash is likely to go to chip makers like Nvidia (NVDA -6.22%) and infrastructure suppliers like Dell (DELL -2.72%).
- “Today, the United States leads the global AI race”: Microsoft President Brad Smith praised the efforts of the U.S. private sector, urging the incoming administration to go easy on regulation.
- The seventh best-performing Magnificent 7 stock in 2024: AI data centers need power, and Stock Advisor recommendation Microsoft should get plenty from its deal to restart a Three Mile Island power plant, due to come online in 2028.
3. Drugstores in Need of Medicine
Walgreens Boots Alliance (WBA 2.11%) was the worst performer on the S&P 500 in 2024, falling 65% over the year. Increasing competition from online prescription delivery helped send the pharmacy group to a loss in 2024, with a hit from opioid liabilities. But Q4 did beat expectations, as the company aims for adjusted earnings per share of $1.40 to $1.80 in 2025. Wall Street expects positive earnings for Q1, due Friday.
- Private buyout, or sell Boots?: Walgreens got a 3.4% boost in December following reports from the Wall Street Journal of a $10 billion-plus private equity buyout approach from Sycamore Partners. That in turn raised the possibility of a new attempt to sell off its UK-based Boots chain.
- “Strong growth in our digital sales and pharmacy operations”: Albertsons (ACI 0.61%) should give us a taste of the pharmacy business with its Q3 update on Wednesday, after CEO Vivek Sankaran spoke of strong year-over-year member growth at Q2 time. The stock is down 14% over 12 months.
4. Next Up: December’s Jobs Report
There’s a focus on jobs this week, with December’s unemployment report due on Friday. Forecasts show non-farm payrolls rising by 155,000, down from 227,000 in November. The unemployment rate is expected to stay at 4.2%.
- “Consistent with a firm labor market”: Bloomberg suggests employers tempered their December hiring, and puts the average 2024 monthly job growth at 180,000. It rates that as healthy, and says it should ease any pressure on the Federal Reserve to boost growth with quicker rate cuts.
- Job openings update on Tuesday: Job openings rose to 7.7 million in October, from 7.4 million in September. If the November figure remains unchanged from that as expected, it could be more evidence of a steady labor market.
5. Foolish Fun
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