While the headlines around Eddy Cue’s testimony sparked concerns about Apple’s reliance on Google Search (shares of AAPL closed down 1%), the financial reality is less alarming. The Apple-Google Search deal contributes roughly 15% to Apple’s operating income. If that revenue were lost or reduced, Apple has several alternatives, including deeper integration with AI partners like OpenAI, Perplexity, and Anthropic, or even launching its own search product within Safari. My biggest concern is that this introduces a new risk factor into the investment case - one that may take time to fully resolve.

There’s a shift underway in how people use search and it’s not going in Google’s favor. Last quarter, 56% of total revenue was from Search, and I estimate the segment accounts for 90% of profits. The company is still dominant, but their Golden Goose is falling ill. From Eddy Cue's comments at the Google trial, Apple is seeing declining Safari searches (Google) to rising AI competition, the headwinds are real. The stock may look cheap, but without a clear plan for navigating the post-blue-links world, it's likely going to get cheaper.

Apple’s March results and June guidance underscore the company’s fundamental strength. However, Cook’s uncertainty about the business in the back half of this year tempered enthusiasm, and shares sold off about 4%. As for tariffs and the supply chain, the company is taking proactive steps to navigate the storm. Bottom line: while you can’t count on the macro, you can count on Tim Cook to make the right decisions for both the near and long term.

Meta's March earnings exceeded expectations and the company raised revenue guidance for June. To date, these results are the best example of a company seeing measurable returns from AI. Increased engagement and improved margins highlight the operational benefits of AI at scale. The best part for Meta is they're just getting started.

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Apple’s March earnings stand out as a uniquely forward-looking moment in my 20+ years of analyzing and investing in the company. The focus will be less on the quarter’s numbers and more on the company’s comments about its long-term positioning in four key areas: Tariffs, manufacturing in China, demand in China, and Apple Intelligence.

Investors will largely look past Meta's March results and focus on the guidance. With 10% of Meta’s ads tied to Chinese sellers, a one-third cut in spend could dampen 2025 growth estimates from 13% to 8%, inline with Google. Reality Labs cuts should keep earnings unchanged. Within a year, the China headwind will be sorted out, and the company's revenue growth should be higher for longer based on injecting AI across its product lines. As for Capex, I expect it to remain unchanged at $60-$65B for the year.