Apple's stock fell 4% due to weaker demand and competition in China, with analysts questioning the impact of its AI on sales. Major banks reported mixed Q4 earnings, with Bank of America exceeding estimates while Wells Fargo fell short on revenue. Rio Tinto and Glencore are in talks for a potential merger, though challenges remain. Upcoming earnings reports from Truist Financial and Regions Financial are anticipated, focusing on digital expansion and loan demand. Apple has seen a 190% increase in stock value over the past five years, outperforming the S&P 500's 78% gain.

Breakfast News: Apple's AI Yet To Excite

January 17, 2025

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With markets closed on Monday for Martin Luther King Jr. Day, Breakfast News will be back in your inbox on Tuesday, 21 January.

Source: Image created by JesterAI.

1. Apple Crumbles on Weaker Demand

Apple (AAPL -4.04%) fell 4% on Thursday for its worst day in five months, after being knocked off the top spot for mobile phones sales in China, falling into third place behind Vivo and Huawei. The move follows Apple supply chain analyst Ming-Chi Kuo claiming "There is no evidence of Apple Intelligence's ability to benefit hardware replacement cycles or service business."

"Apple suffers from both great expectations and the law of big numbers": Fool analyst Seth Jayson recently reminded investors "It's tough to impress when everyone expects outperformance all the time. iPhone sales are reportedly down 5% for the holiday quarter, something that would be a surprise if Apple Intelligence were seen as a must-have, hit product."
"One of the stickiest consumer product brands in the world": Fool contributor Jason Hall summed it up well: Apple's multiple product streams and long-term technical innovation supports its position as the world's most valuable company, valued at $3.4 trillion. It's currently no. 10 in The Motley Fool's Moneyball database, our AI-driven system that ranks companies' overall strength.

2. Banking Beats

Big banks reported this week, as Q4 earnings season gets underway. Bank of America (BAC -0.98%) beat earnings estimates for the fourth quarter in a row, with strong performance across its segments. CEO Brian Moynihan spoke of continuing momentum into 2025.

"Ongoing and future spending requirements will likely be inflationary": JPMorgan (JPM 0.76%) CEO Jamie Dimon warned of "dangerous and complicated" geopolitical conditions, as the bank posted a 19% beat on earnings with net income climbing 50% year over year.
$20 billion stock buyback, 15% dividend rise: Not all expectations were beaten, as Wells Fargo (WFC) fell slightly short on revenue with a 0.5% year-over-year fall. The bank did beat earnings estimates, and has returned cash to shareholders this year.

3. Major Miner Merger?

Bloomberg reports Rio Tinto (RIO -1.11%) has been in talks with Glencore about a merger of part or all of the two businesses, though no deal was reached. A full merger would be one of the biggest ever in the sector.

"Didn't make a lot of sense": Matthew Haupt at Wilson Asset Management sees Glencore's exposure to coal as a hurdle to a deal, as Rio is trying to move out of coal and toward lithium and copper to satisfy battery demand arising from changing energy needs.
"As fast and furious as possible": Saudi Arabia's energy minister stressed the need to invest in critical minerals mining at the Future Minerals Forum in Riyadh this week, as the kingdom announced a new $100 billion mineral investment project.

4. Next Up: More Banking News

Hidden Gems recommendation Truist Financial (TFC -0.90%) reports Q4 earnings before today's market bell, following on from a third quarter that continued the company's 2024 record of beating estimates.

Two things to watch for: Truist previously spoke of expanding its digital platforms, while seeing stimulating loan demand as a key challenge.
Digital bank: Dividend Investor rec Regions Financial (RF -0.73%), at the forefront of the digital banking revolution, will also post a Q4 update this morning after beats in the past two quarters. How the company's net interest margin goes could be key, after rising to 3.54% in Q3.

5. Foolish Fun

First recommended in Stock Advisor back in 2008, Apple is up 190% over the last 5 years. Across the same period, the S&P 500 is up 78%.

Will Apple be a market-beater over the next 5 years? Debate with friends and family, or become a member to hear what your fellow Fools are saying!