Apple Hints Big Things For AI

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The data showed labor costs jumping the most in a year — an alarming news for inflation. Regardless, economists expect a 240,000 gain in nonfarm payrolls which would be the slowest pace since November. But still, that number would still paint a picture of a strong labor market. Today’s jobs report will be key because the Federal Reserve chose to keep rates unchanged, and Fed Chair Jerome Powell said any weakening in the labor market would warrant rate cuts. Wall Street, of course, isn’t hoping for a steep drop in jobs data. They still do want the data to come in modest. A too-hot reading could keep rates elevated for a longer time. - “While the Fed appears to have all but ruled out a rate hike, it also made clear it’s willing to keep rates higher for longer,” said Chris Larkin at E*Trade from Morgan Stanley. - “The markets will be hungry for any data suggesting the economy isn’t heating up any more than it did in the first quarter.” Chris Larkin at E*Trade from Morgan Stanley (Photo: Bloomberg Live) The options market showed that investors expect huge volatility today, with an expected move of 1.2% in either direction after the release of the jobs report. Apple’s earnings report: The iPhone maker beat Wall Street’s expectations, but its overall revenue was down by 4%. The decline was largely due to iPhone sales falling 10%. Apple announced $110 billion in share repurchases which is a whopping 22% jump from last year’s $90 billion authorization. As a result, Apple’s stock price jumped by about 3% after the bell. CEO Tim Cook said overall sales is expected to “grow low single digits” for the June quarter. Cook pointed out that the last quarter had a tough comp. There was a delay in iPhone 14 sales (due to supply issues), so Cook said that delayed sales were removed, the company would have grown on a yearly basis. - “If you remove that $5 billion from last year’s results, we would have grown this quarter on a year-over-year basis,” Cook said. “And so that’s how we look at it internally from how the company is performing.” What could be a music to Wall Street’s ears, Cook said the company has “big plans to announce” from an “AI point of view” at its iPad event next week. Apple hasn’t benefitted much from the AI frenzy (in the stock market), so we will see if it could spark a rally in the stock. Tim Cook (Photo: Joyce Kim) This Stock May Be A Blockbuster Once The Real Estate Market Turns Today’s stock pick: Compass, Inc. (COMP) Compass is the stock you want to own ASAP. Listen, it is not a secret that the real estate industry experienced brutal years recently due to higher mortgage rates. The pandemic-era was easy money for real estate agents, but not anymore. Naturally, Compass’s stock price plummeted from its 2021 IPO with a 80% loss. There was even whispers about whether Compass could stay in business. Yes, its revenue declined in the last two years. It was normalized to $4.9 billion in total revenue for 2023 — a modest increase from $3.7 billion in 2020. Notably, the fourth quarter showed just a 1% y-o-y decline which may indicate that the bottom could be close for the industry. (Source: Compass) But Compass is not losing agents. The fourth quarter saw a 8% y-o-y growth in the average number of principal agents. That’s the key. The company is growing during the tough market. In the past, there was a huge controversy among real estate agents about Compass’s incentives. The company would grant shares, cash, and other incentives to get agents to join the company. At that time, Compass was an upstart that was aggressive in grabbing market share. And of course, it ruffled many feathers in the industry. In a positive news, Compass recruited more than 2,000 principal agents in the last quarter without any cash or equity sign-on incentives. The practice was eliminated in August 2022. Regardless, the company had no problem with recruiting. (Source: Compass) Moreover, Compass grew its market share (both year-over-year- and quarter-over-quarter) in the fourth quarter. Its agent retention is robust at 97%. Compass was running at a negative cash flow due to its status as a startup. But the company is ready to mature into a cash flow positive company. It achieved a $325 million improvement in its free cash flow — despite the fact that revenue fell by $1.1 billion last year. Everything is designed to boost margins once market conditions improve and achieve positive free cash flow by the end of 2024. Meaning? It is ripe for a blockbuster stock. Especially when the stock is trading at a market cap of just $1.9 billion. - “Over the past two years, we have successfully navigated the worst residential real estate market in decades and significantly reset our operating expense levels, positioning Compass for what we believe will be significant upside when the market begins to recover,” said Robert Reffkin, Founder and Chief Executive Officer of Compass. (Source: Compass) Now, what makes Compass special? It is a technology-first company in an old-fashioned industry. Compass developed a CRM that makes it easy for real estate agents to track their deals. Here’s the screenshot of its proprietary CRM: (Source: Compass) When the agent clicks one deal, it can store all the photos, requests tasks, take notes, and so on. (Source: Compass) What if the agent wants to market the listing? The CRM can generate a video within a few mouse clicks. It can even create a digital ad within the software. (Source: Compass) The agent can sign up with Compass’s marketing team to market the listing for her. Meaning? The agent doesn’t need to build a full marketing team. Just focus on meeting new clients and close the deals. Compass truly makes it easy for agents to do their job. (Source: Compass) Bottom line: Compass is a high-flying real estate company that is perfectly positioned to become a blockbuster stock as soon as the market turns. This is a stock to own right now. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](