Apple Shares Slide 2.5% as Tim Cook Confirms Exit, Wall Street Backs New CEO John Ternus

Quick overview

Apple Inc. (NASDAQ: AAPL) dropped as high as 2.9% on Tuesday after the company said that CEO Tim Cook would leave on September 1. Cook’s 15 years at the helm turned Apple become the most valuable company in the world.

On the Nasdaq, shares fell to a low of $265.40 before recovering some of their losses. They ended the day at $266.17, down $6.88 or 2.52%. The stock rose 0.56% to $267.65 in after-hours trading, which was a little rebound.

Tim Cook Hands Over to John Termus as New Apple CEO

Cook, 65, who took over from Apple co-founder Steve Jobs in 2011, will become executive chairman. In this post, he will continue to work with politicians throughout the world, a job he has done particularly well at times of geopolitical and trade stress. John Ternus, Apple’s senior vice president of hardware engineering, is taking over as CEO. He has been seen as the best internal candidate for the job for years.

The board of directors of Apple said that the move was part of a long-term succession plan, which meant that things would stay the same instead of changing. Ternus has been with Apple since 2001 and was in charge of making the famous M-series silicon chips. Most recently, he promoted the MacBook Neo, a small laptop that costs $599 and has sold out since it came out last month.

A Legacy of Staggering Growth

Cook’s time as CEO is one of the most important in business history. Apple was worth about $350 billion when Steve became CEO. He gives it to someone else with a market cap of more than $4 trillion. The stock price has gone up by more than 1,900% since he took it. The company’s yearly income grew from $108 billion to $416 billion.

Aside from money matters, Cook was in charge of the launch of the Apple Watch, AirPods, and a quickly growing services empire that included Apple Music, iCloud, and Apple TV+.

Wall Street Stays Bullish on Apple (AAPL) Stock Outlook

Even though the stock fell on Tuesday, major brokerages still thought it will go up. Wedbush, Evercore, Citi, and Bank of America all said to buy, with price targets of $315 to $350. Dan Ives of Wedbush said the timing of the change was a “shocker,” but he kept his outperform rating and $350 target. He said that the Worldwide Developers Conference in June will be very important for Apple to show off its AI plans.

Morgan Stanley analyst Erik Woodring made comparisons to the handover in 2011, after which Apple shares rose 57% in the next year. He kept his overweight rating and $315 target, saying that the change in CEO is “unlikely to change Apple’s core strategy.”

The Challenges Ahead for Apple

Ternus takes over a corporation that is under a lot of stress. Apple has been criticized for being slow to adopt generative AI, whereas Microsoft and Google have sped up their consumer offerings. The Vision Pro headgear hasn’t sold well, and the company’s home assistant presence is still restricted.

Bank of America’s Wamsi Mohan, on the other hand, says that Apple’s M5 silicon could give the company a unique edge in “edge AI,” which is running artificial intelligence on devices instead of in the cloud. He also says that Ternus, who led the M-series program, may be the best CEO to carry out and explain that strategy.

Analysts mostly think that Apple’s next earnings report, which is coming on April 30, will show a strong quarter thanks to iPhone, Mac, and services. “You don’t make an announcement like this on a Monday night if you think you’re missing earnings,” said one strategist.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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