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Earlier this week, Tim Cook stepped down as Apple CEO, turning the reigns over to John Ternus, formerly Senior Vice President of Hardware Engineering. While Cook is staying on as executive chairman, assisting with certain aspects of the company including engaging with policymakers around the world, this is certainly a turning point for Apple. Ternus’ rise to the top job is expected to herald a shift in company strategy, with a more product-oriented vision compared to Cook’s operational expertise. His first public-facing role will be to introduce the new iPhone 18 lineup at the company’s fall media event, scheduled for September 9th. As the chart below built with YCharts shows – Ternus has big shoes to fill.
Apple’s total return over the roughly 15 years of Cook’s tenure is an extraordinary 2,790%. The stock saw massive acceleration during the Covid-era bull market (2020-2021), where it roughly doubled in a short window. When compared to the S&P 500 and Dow Jones Industrial Average over the same period, Apple has dramatically outpaced both – delivering roughly 3.7x the S&P and 5.0x the Dow.
Ternus becomes only the 3rd CEO at Apple, with founder Steve Jobs passing the torch to Cook. That transition could only be described as phenomenal. Under Cook, the company grew the valuation from $350 billion to its current market capitalization of $5 trillion. Apple’s total revenue in 2011 was reported as $108 billion. Apple reported $109.4 billion in revenue for Q3 2026 alone! Think of all the innovation introduced during the Cook era; products such as the Apple Watch and AirPods, services such as iCloud, Apple Pay along with Apple Music and Apple TV. Not to mention Apple’s sterling reputation – it has been named the worlds most admired company by Fortune magazine in every year of Cook’s stewardship.
One market strategist described the transition from Jobs to Cook this way: “Those were enormous shoes to fill, and Cook not only filled them—he wore them well, rewarding investors magnificently along the way.” Time will tell whether the John Ternus era can achieve the same level of success. We will be watching closely, but for now, a tip of the cap to Tim Cook for a tremendous run.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
Have you ever wondered how the supply of physical currency is determined? I’m referring not to the broader money supply, but to actual bills and coins. As the chart below from Torsten Slok at Apollo Wealth shows, the amount of cash printed tends to track the interest-rate environment. From 2021, when rates were near zero, through 2024, when they rose above 5%, the number of new paper bills ordered by the government fell from roughly 7.6 billion to about 4.4 billion.
When interest rates are higher, holding physical cash means giving up more interest income, which reduces demand for dollars. Still, printed currency represents only a small share of the total money supply. Roughly $2.3 trillion in physical currency is currently in circulation, compared with about $21.1 trillion in digital money, including bank balances, electronic transfers, and savings.
While the Federal Reserve strongly influences the digital money supply through monetary policy, the printing of physical cash is largely demand-driven. The Fed orders new bills from the Bureau of Engraving and Printing to replace worn currency and meet seasonal spikes in demand, such as during the holidays.
Given current trends, demand for printed cash will likely continue to decline. I still like keeping some cash on hand, but younger generations seem to view cash as more of a hassle than using a card or Venmo. The days of the George Costanza wallet are long gone!
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
One of the key takeaways from the most recent round of quarterly earnings reports from the AI boom companies was the increased projection on future capex spending. Viewpoints certainly differed across the analyst spectrum on whether this increased spending guidance could be seen as bullish given the increased demand, while others were more skeptical and concerned about the reduction in free cash flow for these companies. One thing that is non-debatable is that AI infrastructure spending is leading the way globally in where future dollars are expected to be spent. As the chart below from PIMCO funds illustrates, the buildout of AI infrastructure, combined with rising defense spending and energy security investments, could add roughly $14 trillion to global capital spending over the next five years.
That spending is approximately 1/8th of the entire global GDP. Certainly significant! The buildout of data centers, processing capacity, and power infrastructure is not only reshaping corporate balance sheets, but also is bleeding into multiple sectors, not just technology. As the events in the middle east have once again proven, the chokehold on oil has had ripple effects across the global economy. Geopolitical risk will increasingly play a role in the AI boom, as energy security is now inseparable from its impact on energy-intensive technologies such as AI. We talk often about “what inning” this is for the AI boom. Taking that analogy from a slightly different angle, as this chart and many others highlight, regardless of the inning, we are most certainly in the “spending big money on our roster” portion of this economic cycle. It seems everyone in the league is spending big but determining what “teams” can build the best roster will continue to be our goal.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
