Sell $AAPL, Buy $GOOG

come back to this in 2036

“fruit of the poisonous tree” (vedant nair + gpt 5.2)

on apple

For the past few years, I’ve had this nagging sense that something wasn’t right with Apple (AAPL 0.00%↑ ). We all have. There’s been something markedly different about their focus, culture, and product innovation in the last 10 years. They’ve lost their je ne sais quoi.

In this era, they’ve failed to lead the way on the next generation of consumer hardware. You can argue that their last truly great product was the AirPods, back in 2016, but even those weren’t novel. To find something world-changing, you’d probably have to go all the way back to 2010, with the iPad and its multitouch. Along the way, they’ve stumbled over new products time and time again. Project Titan, their self-driving car project, was canceled after years of development, never seeing the light of day. The Vision Pro has been a bust; they’ve already started scaling back manufacturing ahead of the next generation.

Quick, without cheating: what’s the current version number of the iPhone? You probably hesitated before giving a sheepish guess, and for good reason, too. They’re unremarkable. Since the iPhone 13, they’ve all felt exactly the same!

Ask your friends when they last upgraded their iPhone, and compare that to the breathless reactions the world had to iPhone releases in the 2010s. No one’s camping outside for the next iPhone anymore. The feature improvements feel smaller and smaller, and there’s only so long that marketing buzzwords can drive consumer behavior.

Under Tim Cook’s stewardship, they’ve clearly shifted their focus from “Value Creation” (building new, innovative products) to “Value Capture” (the services business and walled garden). Services is now a $100B revenue line with disgustingly high margins. But the clock on that bet is now expiring. As Steve Jobs said, you must be the one to disrupt yourself, lest someone else do the disrupting unto you.

warning signs

There are two other structural problems that have me worried about Apple’s future.

First, Tim Cook is rumored to be retiring. Transitions are notoriously difficult (just look at the Ballmer years at Microsoft). It’s not determined who the new CEO might be, but John Ternus is rumored to be the odds-on favorite. I don’t know much about Ternus, but he’ll have to make bold decisions to right the ship. Will he be a risk-on leader, willing to cut focus on shitty product lines and spend R+D on big bets? Or will he bow to the corporate overlords and keep the dividend machine humming?

Second, Apple is no longer TSMC’s “preferred customer”. For over a decade, Apple was the undisputed golden goose at TSMC, getting first dibs on every new chip node. That era is over. As of 2025, NVIDIA has reportedly overtaken Apple as TSMC’s largest customer. Fabs like TSMC make multi-billion dollar capex decisions that look years into the future. TSMC’s analysts have decided that the iPhone is no longer the most important silicon on the planet. Probably nothing!

the killer

The painfully obvious, perfect representation of Apple’s product woes is Siri. When Apple first acquired Siri almost 15 years ago, it was brilliant. And then, it just never changed. IT NEVER GOT BETTER. Sure, they claimed that they added features, but it never meaningfully improved the quality of my experience. The world changed, and AI architectures did along with it, but Apple sat comfortably on its hands. Today, Siri is at best a way to set a kitchen timer, and at worst, an annoyance that turns on when you don’t mean it to.

Then ChatGPT happened, and Apple was caught flat-footed. Three and a half years later, their response has been pitiful. Apple Intelligence is nothing short of horrible; most of my friends went out of their way to turn off the feature. The failure was so striking that their Head of AI is stepping down. Apple is the only company in the Mag7 that is being left behind in the AI race.

This is a big problem because the way we use consumer hardware will fundamentally change in the age of AI. Consumer devices are now the gateway to your AI personal assistant. For the average person, applications and operating systems won’t be as valuable as the intelligence layer. And Apple, as the world’s preeminent consumer hardware company, has left the door open by failing to build its own world-class intelligence.

This brings me to the last nail in the coffin. This month, Apple announced it is outsourcing its device AI to Gemini. APPLE IS OUTSOURCING AI TO GOOGLE.

This should be a red alert for anyone familiar with technology history because it rhymes all too well with the IBM/MSFT saga.

the new ibm

In the 1980s, IBM was the world’s dominant computing provider, but it outsourced its operating system to a fledgling startup. They failed to realize that the most valuable part of the stack was not the PC itself, but the operating system that ran on it. 45 years later, Microsoft is a multi-trillion-dollar company, and IBM is worth a few hundred billion.

A similar scenario seems fated to play out for Apple and Google. The subscriptions, apps, and the walled garden that Apple has meticulously crafted won’t matter quite as much in the age of AI. Don’t get me wrong, these components still have value in their own right, but the majority of the value will mostly accrue to a different part of the stack: the intelligence.

IBM had a decent business for years after the OS deal. They still do. But their growth trajectory looked radically different than Microsoft’s. Commodity hardware providers don’t make it into the Mag7.

If Apple continues to fail at 1) delivering a new, world-changing piece of consumer hardware and 2) building and owning the intelligence layer, I don’t think they’ll be considered a Mag7 company in 10 years. And so far, I haven’t gotten any signs from their team that they have what it takes. They’ll do fine as a business. They’ll continue to make money, I’ll continue to buy a new MacBook when I want a laptop upgrade, and new AirPods whenever I inevitably lose them, but the well will eventually run dry. You can only capture so much value before you’ve squeezed out every last drop.

Oh, and Berkshire also sold off most of their Apple holdings (not that we should be paying attention to what the world’s best investor is doing with his money).

on google

Nothing I have to say about Google (GOOG 0.00%↑ ) is revolutionary. They’re my favorite to be the world’s first $10T company. The market (almost) agrees with me. That’s why they’re worth $4T today. The reason that I’m excited is that I think there’s at least another 6T in the tank!

In 2023, the narrative was that Google was left for dead. The Bard rollout was a disaster, losing the company $100 billion in market value in a single day. ChatGPT was the fastest-growing consumer app in history. Perplexity was starting to nibble away at the search pie. Inside Google, years of peak-wokeness and COVID-era stagnation had created a culture of scleroticism. Google wasn’t seen as a place where people did their best work. Instead, it was where you went to work from home, phone it in, and become a poolside product manager.

Google’s golden goose, search, was under attack, and for the first time in two decades, they had no answer.

In 2025, Google came roaring back. As of January 2026, Gemini has surged to a 21.5% share of the AI chatbot market, up from just 5.4% a year ago. They’ve reentered war-mode. Sergey is back, working on the Gemini team alongside Jeff Dean. Demis and DeepMind have accelerated, and practically every business line at Google is crushing.

Google’s mix of products, infrastructure, models, and data makes it n = 1. It is the only entity on Earth that is truly vertically integrated for the AI era.

advantages

1. Google owns the world’s biggest, most important web properties

Google owns Search and YouTube, the two biggest web properties in the world. They respectively have 4.9 billion and 2.7 billion monthly active users.

They also have 7 other products with 1 billion users each: Android, Chrome, Gmail, Drive, Maps, Play Store, and Photos. These give them treasure troves of data on an unprecedented scale, and a large, diverse product surface to deploy AI products that other companies don’t.

2. YouTube

YouTube Shorts has a staggering 200 billion daily views, and YouTube TV is now the largest pay-TV provider in the US.

Their library of video content is the biggest in the world, which makes me bullish on their ability to lead the way in generative image and video models and bring them to socials. OpenAI and Meta’s efforts here have flopped. I’m interested to see what Google can cook.

And don’t forget, one of the first commercial use cases for deep learning was social media algorithms. Expect better AI to keep those to keep printing.

3. CapEx

This is where the boys get separated from the men. Google is the only top AI lab that can fund its CapEx without equity funding.

Sam Altman is currently back in the Middle East to raise another $50B to build more infrastructure. How many sovereigns exist with big enough checkbooks? At OpenAI’s growing scale, the equity markets can’t quench their demand forever. They need to spend their own cash.

Meanwhile, Google is funding its $90B in annual CapEx entirely from its own bankroll. They’re expected to “significantly increase” CapEx this year.

4. TPUs

Google’s v7 TPUs are the best alternative to GPUs on the market, offering roughly 4.6 petaFLOPS of compute, matching NVIDIA’s Blackwell B200.

They are the only AI lab to have proprietary, leading-edge compute at a time when everyone else is desperate for allocation. Even Anthropic has expanded its use of TPUs, signing a deal to access up to 1 million chips through 2026.

5. Gemini will be the world’s biggest consumer chatbot

Gemini’s referral traffic grew 388% YoY, and it now holds a 22% market share. During this same period, ChatGPT’s share has fallen from 86.7% to 64.5%.

Gemini’s integration as the default assistant on 800 million Android devices and its new role powering Siri mean it will continue to eat into ChatGPT’s lead and eventually surpass it. OpenAI also won’t be able to keep up with the combination of marketing spend and distribution advantage that Google already has.

6. Google Cloud

Google Cloud is the fastest-growing major cloud provider. Revenue growth has accelerated to 34% YoY, outpacing both AWS and Azure. They’ll hit $20B in net income this year, and their contract backlog grew 82% YoY to $155B.

Since they’re vertically integrated with their own cloud infrastructure, they have a major margin advantage. Competitors pay a margin “tax” to NVIDIA or other hyperscalers when they want to allocate compute. The $38B OpenAI spends on AWS doesn’t go as far as the same $38B Google will spend on its own compute.

7. The AI productivity suite

Google Workspace is becoming AI-native, and its features are already awesome. The workspace bundle now includes Gemini, AI in Gmail, notetakers, and more, all for less than a ChatGPT seat. I’m mulling over cancelling that subscription.

The winner of the AI business suite will generate massive revenues. I’m not ready to say that Google will dethrone Microsoft Office, but I do think they’ll bring a better product to market first.

8. Antitrust

One of the biggest risks to this thesis was the government forcing Google to sell off its ecosystem. But in a massive win for Google, the 2025 antitrust ruling was far less severe than expected.

The judge ruled that Google would not be required to divest Chrome or Android, explicitly noting that the “advent of GenAI” has fundamentally shifted the competitive landscape. In an ironic twist of fate, Gemini finished that year with rocket ship growth, while OpenAI and Perplexity both tried and failed to launch browsers.

If anything, Google is now more of a monopoly in 2026.

9. Founder Mode

Sergey Brin said he’s willing to bet the company on AI. I believe him.

The big risk is Search, obviously. It’s the greatest money-printing, high-margin business of all time, and Google has to choose to disrupt itself and potentially kill it. They’re showing they have the appetite to do it. Google AI mode is gaining more real estate on the Search page (it’s a great product by the way, and has completely replaced Perplexity for me).

Even if they become the world’s leading chatbot, which is a multi-trillion-dollar prize, there are doubts about how well it will monetize. I doubt Gemini could ever be as high-margin as Search, but I can see a world where it does more revenue. Leads from chatbots have 3x higher conversion rates (lower CAC) than traditional methods, and you can see a world where frictionless, agent-to-agent commerce increases LTVs. Each query could be more monetizable than traditional search, with highly personalized targeting on the scale of trillions of queries per year.

Look, I don’t have a perfect answer for how they’ll monetize effectively. I do believe that 1) it’s possible and 2) Google is willing to disrupt itself. Maybe I should give Apple more leash on point 2, but there’s something rotten about their culture that won’t let me do it!

el fin

That’s my thesis. GOOG 0.00%↑ becomes the first $10T company and in the next 10 years, AAPL 0.00%↑ falls out of the Mag7 conversation.

Take it with a grain of salt. It’s from a retail investor, written in a few hours, and is probably lacking some nuance. I’m not just any retail investor; I’m a 23-year-old with minimal savings and no dependents or mortgage. My bankroll is marginal compared to someone making investing decisions for their retirement account. I can see how this changes the decision calculus.

That said, I’m placing a buy/sell order tonight!

I mostly wrote this as an exercise in reasoning. I plan to review this prediction into the future and grade my logic.

I plan to get in and out of positions on 5 to 10-year horizons, so all that matters to me is that I’m directionally correct. Now, let me stop writing and go put my small amount of money where my mouth is.

Thanks for reading, and let me know what you think!