A Troubling Apple Chart

As we showed previously, Apple's results were not bad, with misses across the board in product sales offset by overall beat at the top and bottom-line, even as ASPs and margins declined, while projections came in stronger than expected and the cherry on top was the $100BN stock buyback/16% dividend boost.

And while overall investors were impressed with the results as the bounce in the stock after hours shows, a troubling trend emerged when looking at AAPL's inventory, which soared a whopping 164% Y/Y due to the disappointing "supercycle" sales, confirming that the company is stuck with a lot of unsold iPhone X, a clear indication that the supply-chain is pretty much full at this moment (explaining all the negative commentary by Apple's upstream suppliers) and that Apple will be unable to sell nearly as many iPhones as it hopes unless it engages in some very aggressive cost cutting, slamming ASPs, and betting the house that the successor to the iPhone X will be the much anticipated "supercycle" hit.