Industry-leading source of Apple product and business strategy analysis. Founded / written by @NeilCybart
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Above Avalon retweeted
Two weeks ago during SpaceX’s second earnings call as a public company, Elon Musk was asked about a SpaceX and Tesla merger.
For someone not known to shy away from bold predictions, Musk didn’t use the opportunity to talk up a merger. Instead, Musk went so far as to throw some cold water on the idea.
To me, such rare narrative control from Musk spoke to the seriousness of a SpaceX and Tesla merger. In my newest Inside Orchard essay, available below, I lay out the reasons why I think a SpaceX and Tesla merger is likely. I discuss timelines, deal terms, and why SpaceX will need to put in some work in crafting a compelling story for the merger.
Why a SpaceX and Tesla Merger Is Likely
insideorchard.com/essays/why…
A Musk Co. conglomerate structure consisting of Elon Musk’s various public and private ventures strikes me as something of an inevitable end point.
Above Avalon retweeted
A big takeaway from Apple’s 4Q26 results and 1Q27 guidance had to do with noise. As expected, there was an excessive amount of noise found with the numbers due to product launch timing differences and supply issues. This makes it difficult to come away with many new observations regarding sell-through demand. All of my prevailing assumptions remain steady.
What we can do instead with Apple's results and guidance is begin to quantify the financial impact from the memory crisis. (Such an exercise will be essential when it comes to mapping Apple's financial route out of the memory crisis as well.)
In my newest Above Avalon article, available below, I examine Apple's gross profit growth with the memory crisis in mind. The end result is an estimate for how the memory crisis is impacting Apple's gross profit generation capabilities.
Above Avalon article:
Apple 4Q26 Earnings Review: Measuring the Memory Crisis Impact
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
Apple's quarterly earnings are always a good time for some narrative busting.
Those of you who have been around for a while will remember the loud voices adamant "Apple is becoming a services company." The claim was always nonsense as Apple's mission never changed.
Well, in 4Q26, Apple generated nearly as much year-over-year revenue growth from a supply-constrained Mac product category (+$2.1B) that turned 42 years old this year as Services (+$2.8B).
My first Above Avalon article dedicated to reviewing Apple's 4Q26 earnings (and 1Q27 guidance) is available below.
Above Avalon article:
Reviewing Apple 4Q26 Earnings: Look Through the Noise to See Market Share Gains
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
Here’s a quick (touch) spin around the new MacBook Pro with PROLED XR display.
Above Avalon article:
Apple 4Q26 Earnings Review: Measuring the Memory Crisis Impact
aboveavalon.com/notes/2026/1…
Above Avalon article:
Reviewing Apple 4Q26 Earnings: Look Through the Noise to See Market Share Gains
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
In terms of why AI agents are flopping with the mass market, it's technology that has come a long way in just the past year but which is very raw and in search of problems to solve.
Prior to 2026, Mark Zuckerberg barely even said the word agent on a Meta earnings call. Today, he's positioning Muse as Meta's future. That's not called product vision. Instead, that's called desperation.
We are being gaslit with products that make a mockery of our privacy while unsuspectingly fueling what will become a pandemic of unhappiness, dissatisfaction, and emptiness.
In the Above Avalon article below, I explain in detail why the fundamentals behind AI agents concern me. The article ends up explaining why the mass market doesn't want anything to do with them.
aboveavalon.com/dailypremium…
This has been the worst two-to-three-month stretch for AI since the pandemic.
AI companies have completely lost the plot. Everyone is focused on getting over the IPO finish line before it's too late. You can feel the waves of employees eager to cash out. The data center topic, botched from the get go, has become downright toxic in the U.S. Personal agents, in their current form, are a massive head fake.
Musk punted SpaceX through an IPO earlier in the year before most people even knew what was going on. Anthropic is going to try to give it a go with its IPO in a tumultuous environment. OpenAI missed the IPO window altogether this year.
On the product front, it's a mess. Agents aimed at the mass market are flopping HARD. This is technology in search of problems to solve. The only people still pushing them at consumers are AI grifters. Meta disclosed Muse usage figures. They were not impressive despite an absolutely insane marketing push in the U.S. OpenAI's Dots, aimed at early adopters, are uninspiring. These products are not solving problems. Companies are pushing agents because they need to figure out a way to monetize obscene amounts of capex ASAP. Wall Street has had enough.
And all of this took place in what was probably the most open and friendly AI regulation environment imaginable. That will be ending in January.
Above Avalon retweeted
This has been the worst two-to-three-month stretch for AI since the pandemic.
AI companies have completely lost the plot. Everyone is focused on getting over the IPO finish line before it's too late. You can feel the waves of employees eager to cash out. The data center topic, botched from the get go, has become downright toxic in the U.S. Personal agents, in their current form, are a massive head fake.
Musk punted SpaceX through an IPO earlier in the year before most people even knew what was going on. Anthropic is going to try to give it a go with its IPO in a tumultuous environment. OpenAI missed the IPO window altogether this year.
On the product front, it's a mess. Agents aimed at the mass market are flopping HARD. This is technology in search of problems to solve. The only people still pushing them at consumers are AI grifters. Meta disclosed Muse usage figures. They were not impressive despite an absolutely insane marketing push in the U.S. OpenAI's Dots, aimed at early adopters, are uninspiring. These products are not solving problems. Companies are pushing agents because they need to figure out a way to monetize obscene amounts of capex ASAP. Wall Street has had enough.
And all of this took place in what was probably the most open and friendly AI regulation environment imaginable. That will be ending in January.
Above Avalon retweeted
Apple's outlook for 1Q27:
- Revenue growth: 7% to 10%.
- Services revenue: 8% to 9% (third-party licensing and FX headwinds)
- Gross margin: 45% to 46% (higher memory costs / Siri AI)
Noisy guidance (as expected) impacted by a variety of issues including supply issues.
Above Avalon retweeted
Apple 4Q26 results:
- iPhone revenue: $57.6B - up 17% (Very Strong)
- Services: $31.6B - up 10% (Good)
- Mac revenue: $10.8B - up 24% (Very Strong)
- Wearables, Home & Accessories: $8.3B - down 8% (Weak)
- iPad revenue: $6.2B - down 11% (Weak)
Above Avalon retweeted
Apple just reported earnings:
- $114.5 billion revenue (up 12%)
- 46.9% gross margin (adjusted to remove tariff refunds)
- $2.05 EPS (adjusted to remove tariff refunds)
My expectations, which were above consensus estimates, heading into today:
- $113.8 billion revenue
- 46.8% gross margin (excluding tariff refunds)
- $1.97 EPS (excluding tariff refunds)
Above Avalon article:
Previewing Apple’s 4Q26 Earnings: Jitteriness Is in the Air
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
In order to write my newest article about Apple's LA event (available below), I went back and rewatched Apple's October 2010 Mac event, where the clip of Steve Jobs saying multi-touch doesn't work on vertical laptop displays came from.
Few people bothered to watch a few minutes before the clip when Steve explained Apple's goal was to bring innovations from the iPhone and iPad, such as multi-touch, to the Mac. It's the same overarching goal Apple is following 16 years later.
Fun fact: The first ARM processor (Apple custom silicon) was brought to the Mac six years (almost to the day) after that October 2010 Mac event.
A few of my videos from Apple's event in LA went viral on social media this week. This led to hundreds of replies and mentions being sent my way. The experience showed me firsthand how much misinformation is out there as a few high-profile accounts purposely weaponized my videos to say they showed things that they didn't show.
My assumption is that there was a lot of hypocrisy flowing around social media this week. Many of the people who were triggered this week had previously bemoaned Apple for not shipping Macs with touchscreens.
In thinking through this week's Apple announcements, including the LA experience, I don't think a touchscreen coming to the Mac was the main takeaway. Instead, we are in the Apple silicon renaissance. I explained my perspective in my newest Above Avalon article, available below, which was just published.
Above Avalon article:
Takeaways From Apple’s LA Experience
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
I've been using an iPhone Duo for about a week.
An incoming question that I've been getting over that span: So, what do I think?
I think the reviewers botched this one.
Most of my iPhone Duo impressions aren't even close to what was said and depicted in many of the reviews. There is no learning curve found with the iPhone Duo. It's not some awkward mess that needs a lot of figuring out. App optimizations are flowing in. The outer display isn't some half-assed attempt to make do with a crummy situation.
The foldables era has arrived at Apple. My full article with much more detail is available below.
Above Avalon article:
A Week With iPhone Duo: The Foldables Era Has Arrived at Apple
aboveavalon.com/notes/2026/1…
Above Avalon retweeted
The MacBook Pro’s hinge has been redesigned / reinforced to reduce vibration and backwards movement from touching (yet still be easy to open/close).
There is definitely less movement back.
First clip is multi-touch. Second clip is not multi-touch.
Above Avalon article:
A Week With iPhone Duo: The Foldables Era Has Arrived at Apple
aboveavalon.com/notes/2026/1…