On Tuesday local time, Apple Inc. (AAPL) saw its share price fall more than 2% in early trading, pushing its market value below $4 trillion. In terms of news, after the market closed on Monday, Apple announced a major leadership change: current CEO Tim Cook will officially step down as CEO on September 1 and transition to Executive Chairman, with John Ternus, Senior Vice President of Hardware Engineering, succeeding him as CEO. Ternus, 51, joined Apple in 2001 and has long been responsible for hardware engineering, making him a core member of the company’s technical management team. In a statement, he said he would continue Apple’s mission and values and expressed strong confidence in the future. Cook’s departure had been widely reported by the media on multiple occasions, and this official announcement marks the beginning of a new leadership transition cycle for Apple. Analysts suggest that although Cook will remain involved in company affairs as Executive Chairman, the market will closely watch the new CEO’s performance in product innovation and strategic direction.
Apple’s decision to change its CEO has earned praise from some Wall Street analysts. Needham analyst Laura Martin expressed support, despite having previously urged Apple to expand into advertising and M&A. Martin wrote in a report that she is optimistic about the value creation this transition will bring and believes Ternus will inject a sense of urgency and a willingness to take risks into Apple’s product pipeline. Martin has a “hold” rating on Apple and continues to advocate for the company to further expand its advertising business, even suggesting that “Apple has been hurting shareholder value by failing to fully capitalize on highly profitable advertising revenue.” According to her estimates, Apple generated approximately $10 billion in advertising revenue in 2025, accounting for less than 10% of its services revenue and less than 3% of total revenue. She believes this figure should be closer to 50% of services revenue, with a profit margin of about 80%, serving as a key driver of profit growth. Last month, Apple opened up advertising placements on its Maps app and expanded the scope of ads within the App Store.
Martin also stated that Apple needs to acquire or at least partner with Walt Disney Company to extend user engagement duration and obtain differentiated assets with pricing power and competitive advantages. The two companies have a long-standing cooperation, and Apple co-founder Steve Jobs became Disney’s largest shareholder after selling Pixar to Disney in 2006.
Under Cook’s leadership, Apple has been known for its stable performance, but revenue growth over the past five years has mostly been in the single digits, sometimes even negative. Only recently has revenue begun to recover to healthy growth. Observers believe Apple has fallen behind competitors in innovative fields such as artificial intelligence, and Ternus’s background makes him the best candidate to drive change. However, Apple’s current price-to-earnings ratio is close to 35 times, with a forward P/E ratio as high as 32 times, far exceeding that of the S&P 500 Index and peers such as Nvidia and Microsoft. Analysts point out that regardless of Ternus’s execution ability, Apple’s share price has limited room for error. Even if he performs strongly after taking office, the current share price already reflects a great deal of expectations. The market may reassess Apple’s premium before building trust in Ternus.
