☕️ Is Apple done for? I see three options

Howdy 👋 

Here we go again. 

US President Donald Trump has signaled more aggressive tariffs and traders are having a tariff tantrum. 

You know the drill.  

News agencies will tell you tariffs are the enemy but that’s not true. 

It’s the uncertainty that comes with ‘em that has upset the proverbial Apple cart. 

Oh, wait…. 🤦‍ 

Here’s my playbook. 

1 – Is Apple done? - I see three options 

The President has just let fly that he thinks Apple should pay a 25% tariff on iPhones not made in the US. (Read) 

Like that’s gonna happen. 

The latest data I’ve seen suggests a US-made iPhone would set ya back at least $3,500. Probably more like $4k imho. 

Sooooooo…. 

Three options come to mind immediately and, undoubtedly more will surface after another cuppa Joe this morning: 

1. Apple continues to make iPhones offshore and partially abandons US markets to compete with Xiaomi and Huawei in global markets, effectively producing Tier 2 products for US consumers. 
2. Apple begins to reshore but in totally dark or near dark facilities – meaning that they’re driven almost entirely by robots that don’t need spiffy yoga mats, vacations and other perks. I can also envision – as inconceivable as this sounds – a deal between Tesla and Apple that would make Optimus robots a new worker class to get the job done. 
3. Apple begins producing lower-volume products in the US, offers sales incentives, buy backs and other goods that counter the sting associated with tariffs. At the same time, Apple renews a push with the FDA to grant iPhones and other wearables medical devices status which would allow Doctors to prescribe devices and insurance companies to pay for ‘em… at which point margins wouldn’t matter. 

Meanwhile, 🛒 

2 – Karp sells and it’s a total nothingburger 🍔 

Social media mavericks are up in arms over headlines screaming that Palantir’s CEO Alex Karp has sold $50 million worth of shares. (Read)  

Should you be worried? 

I submit, no. 

For two reasons:  

1. CEO Alex Karp still owns 6.43 million shares worth $787M at yesterday’s close. 
2. This is a routine tax related sales tied to vesting restricted stock units.  

Nothing more.  

There’s no drama, no secret signal that Palantir is set to crash to zero.  

Insiders get paid in stock, particularly tech execs. 

When it vests, a chunk is typically and automatically planned for a sale to help cover the tax bill.  

It’s basic housekeeping — not a vote of no confidence. 

Remember executives are people, too.  They have liquidity events constantly for all the same reasons you or I might... like paying for a house, an education, taking care of elderly parents, medical bills, setting up retirement etc. Paying taxes. 

What I’m focused on is that Palantir shares have returned 60.59% YTD versus the S&P 500 which is down -1.63% over the same time frame. 

Hooyah! 

$200 btw. 

Keith’s Investing Tip: There’s never a shortage of headlines crafted to trigger urgency — to make you feel like you have to act right now. But truthfully, that’s just the nature of the game. Every day brings a new reason to panic, pivot, or second-guess. Smart investors and traders know that the real edge lies in tuning out the chaos. 

3 – Nuke hype just hit the headlines (again) 

Nuclear stocks like Oklo and NuScale are surging on reports that US President Donald Trump may invoke the Defense Production Act to turbocharge reactor builds and secure uranium supply chains. (Read) 

Sounds electrifying, right? 

Not so fast. 

Even with Uncle Sam fast-tracking paperwork, nuclear buildout is still a bureaucratic beast. New reactors could take decades to meaningfully juice AI, data centers, or the grid. 

I get it but would rather bet on old school dinosaur juice, midstream transporters, pipelines and utility grade reliability over headline sizzle. 

Nukes are gonna be cool in 2040, but cash flow is a lot cooler now. 

IMHO. 

4 – Big oil’s payout party is ending 

In the headlines today: Big Oil’s record-breaking shareholder payouts are under threat. (Read) 

Buybacks are slowing down—and in some cases, getting slashed—because companies simply may not be able to afford them anymore.  

According to Rystad Energy, 2024 saw oil majors shell out $119 billion in shareholder rewards, but that level of largesse is becoming hard to sustain with oil prices down 12% this year, falling cash flows, and payout ratios creeping dangerously close to 80% of operating cash flow. 

BP has already blinked, trimming its buyback from $1.75B to $750M last quarter. And analysts are starting to question how long others—especially European players like Repsol and Eni—can keep up their dividend-and-buyback balancing act before reality forces cuts. 

But that’s if you’re in the wrong names. 

I like the right names. 

One of my faves has a TSY of 8.49% and a 38 consecutive annual dividend increases on the books. Not to mention a fantastic pipeline and a beta of just 0.81.  

You can sweat the crude carnival if you want, but I’m gonna enjoy the show. 

And, if you’d like tickets, I’m here. 

5 – Thank you for stepping up when others couldn’t or wouldn’t 

Bottom Line 

Successful investors feast on fear. 

Wannabes and ticker tourists nibble on safety – and wonder why they’re always starving. 

Waiter…🙋‍ 

Let’s finish the week strong and MAKE it a wonderful weekend. 

You got this – I promise! 

Keith 😀 

PS: US Markets will be closed Monday, May 26th, for Memorial Day, so let’s plan on getting back together Tuesday!