Apple Earnings Preview - The Gemini AI Pivot & A Potential Government Shutdown: The Weekly Sift Stack - 1.26.2026 (Issue 12)

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Index Tracker Year-To-Date Performance 1.23.2026 Market Close:

• S&P 500 TR: 0.88% - Price: 6,915.61

• NASDAQ TR: 1.15% - Price: 23,501.24

• Russell 2000 TR: 6.44% - Price: 2,669.16

• MSCI International EAFE TR: 3.60% - Price: 10,986.29

• Bloomberg U.S. Aggregate Bond Index TR: 0.08% - Price: 2,350.65

• 10-Year Treasury Yield: 4.221%

• 30-year Mortgage Rate: 6.09%

• Gold: 16.69% - Price: $5,066.70 per oz.

• Bitcoin: 0.58% - Price: $87,920.57

• U.S. Dollar Index: (1.05)% - Price: 98.58

• Crude Oil: 5.76% - Price: $60.73 per barrel

• Core Inflation 12.31.2025:

  • Year Over Year: 2.6%

  • Month Over Month: 0.2%

• Consumer Price Index 12.31.2025

  • Year Over Year: 2.7%

  • Month Over Month: 0.3%

Index Tracker Notes:

The S&P 500 weathered a volatile week as the Greenland trade war temporarily rattled investor confidence in U.S. assets. In Contrast, commodities surged, led by crude oil’s climb above $60 per barrel - driven by escalating tensions in Iran and a severe winter storm. Meanwhile, gold continued its historic ascent, hitting a new all-time-high, surpassing $5k per ounce.

Stock of The Week: Apple (AAPL)

Oddball of the Mag 7

Apple is an oddball comparatively to the other Magnificent 7 companies. With a big earnings report coming up this Thursday, there is a lot of speculation on their partnership with Gemini. Apple has not really developed any major new lines of product for a significant time. Although, the firm remains one of the largest and most valuable companies in the world and continues to trade at an elevated price even though there’s been minimal growth in terms of profit and revenue compared to other Top 10 S&P 500 holdings.

Apple’s AI Gap

Apple is finally addressing its “AI gap” with a massive strategic alliance. Long criticized for Siri’s stagnation, Cupertino has traded its “build-it-ourselves” philosophy for a pragmatic partnership with Google. As of the January 12th announcement, Gemini models will now underpin the core of Apple Intelligence. This collaboration is designed to reinvent Siri from the ground up, transforming it from a basic voice assistant into a sophisticated, Gemini-powered agent. For Apple, the goal is clear: reclaim its status as an innovator by leveraging the world’s most advanced foundation models.

What is a Generative AI Model?

Think of Generative AI, as an AI that creates something new, rather than just sorting or identifying things that already exist.

Traditional AI: How a librarian can find a book for you. It recognizes patterns.

Generative AI: How a librarian can assist you with in-depth research, or an author or artist that can use what they have learned to create a brand-new story or paint a picture. It generates new patterns.

Apple’s Transition

Apple is in the process of transitioning from a pure hardware manufacturer into what analysts call a “Lifestyle Platform” where hardware brings users in and services keep them there.

Premium Hardware as the “Gateway”

Apple’s primary function is designing and selling high-end, differentiated consumer electronics. Unlike competitors that often sell hardware at a loss to acquire users. Apple maintains a 35% profit margin on its devices with the iPhone remaining as the cornerstone with about 51% of total revenue.

High Margin Services & “Ecosystem Lock-In”

Once a user is in the hardware “gateway”, Apple’s focus shifts to recurring revenue and customer retention. The services segment is now Apple’s fastest-growing business, boasting a massive 74% profit margin. Recurring revenue sources include iCloud, Apple Music, and the App Store. Apple also has a “walled garden” on services like iMessage (we know nobody likes those green messages), Apple Pay, and Fitness+ - only available on apple devices, creating high switching costs and adding to that Moat.

Big 3 things to look out for on the upcoming Intel earnings call

1. Sales of the new iPhone: The iPhone accounts for more than half of Apple’s revenue, investors are looking to see that users are continuing their upgrade cycle following the release of the iPhone 17 back in September.

2. Development of AI: Of the Mega Cap Tech names, Apple has been very late to the world of AI. Historically, Apple takes things slower than many of its competitors, particularly with device features. Apple is the most valuable brand in the world and maintaining this status is important to them, which is likely why they have been slow to release their AI features. There has been a big push by consumers in recent years for a Siri re-vamp. Recent iPhone releases have been somewhat dry in terms of features and upgrades so investors and consumers will look for Apple to take the next leap with AI.

3. China Recovery: Investors will keep a close eye on international sales, especially in places like China, which has been particularly weak in recent years. The post-Covid economy has been slow to recover, and we have seen the impacts in the earnings of other companies operating in the region. Secondly, Chinese phone manufacturer, Huawei, has been much more successful in recent years. Thirdly, the tariffs and trade war between the US and China has impacted phone pricing and public opinion of the iPhone in China.

Apple Inc (AAPL) Key Facts

• CEO: Tim Cook

• Founded in 1976 by Steve Jobs, Steve Wozniak, & Ronald Wayne in Los Altos, California

• Market Cap: $3.65 Trillion

• Sector: Technology - Consumer Electronics

• 52-week range: $169.21-$288.62

• Morningstar Economic Moat Rating: Wide

• PE Ratio: 33.37

Apple Inc (AAPL) vs SPDR Shares S&P 500 ETF (SPY) over the past 5-years

Weekly Insight: Partial Government Shutdown Coming?

The U.S. government faces a potential partial shutdown this Friday, January 30, 2026. The central disagreement is about how to fund the Department of Homeland Security (DHS). The U.S. government is facing a partial shutdown this Friday due to a Senate deadlock over Department of Homeland Security (DHS) funding. Following the fatal shooting of a U.S. citizen by ICE agents in Minneapolis, Senate Democrats are holding out on approving a $1.2 trillion funding package unless the DHS portion is removed or heavily reformed. Senate Republicans need at least 60 votes to pass the bill and only hold 53 seats, requiring them to have Democratic support that currently does not exist. With the House of Representatives already on recess and a major snowstorm in D.C. delaying negotiations, there is very little time left to reach.

Currently Polymarket rates a 79% chance of another government shutdown by January 31, while Kalshi posts a 76% chance.

3 Big Takeaways from Recent Intel (INTC) Earnings Call

1. AI & Data Center Traction - Is Intel actually gaining ground in this area?

   Intel was mixed or steady in this area, the company beat revenue expectations ($13.7b vs $13.4b expected) driven largely by the data center and AI group. However, CEO, Lip-Bu Tan, did not announce a big AI win that rivals NVIDIA’s dominance. Instead, he emphasized that the “essential role of CPUs in the AI era continues to grow,” but the guidance for Q1 2026 was weak ($11.7b-$12.7b), suggesting the AI hasn’t fully offset weakness in other areas yet.

2. Margins & Cost Control - Are margins stabilizing as intel restructures?

   We saw positive progress in this area as Intel posted a Non-GAAP gross margin of 37.9%, which aligns with their recovery targets (though down slightly from the 40% in Q3).

3. Foundry Progress:

   Intel showed quiet execution in this area. There were no “blockbuster” new customer announcements on this specific call, but Intel confirmed they are on track with their 18A process node (their most advanced manufacturing tech).

Megacap Earnings Extravaganza This Week

Wednesday January 28th: Microsoft , Meta, Tesla, Visa, & IBM

Thursday January 29th: Apple, Mastercard, Samsung Electronics, SAP, Caterpillar, & Thermo Fisher Scientific

Friday January 30th: Exxon Mobil, Chevron, & American Express

Fed Watch

CME FedWatch has 97% odds of interest rates holding at 3.75% for the Fed Meeting today. Watch for Powell’s tone on 2026 inflation. The market is still pricing in two 0.25% rate cuts in 2026.

Did You Know?

Sift Stack Flashback: On January 26, 2021, in one of the most dramatic short-squeeze episodes in market history - GameStop Corp. (GME) soared following an uptick in social media momentum and a post from Elon Musk “Gamestonk!!” The stock closed up roughly 92.7%, as a massive surge of retail interest forced hedge funds to cover short positions.

Poll Question

Last week’s poll results - “Which Semiconductor stock will perform best in 2026?”

1. 50% Voted - Intel (INTC)

2. 33% Voted - NVIDIA (NVDA)

3. 17% Voted - Advanced Micro Devices (AMD)

   Featured YouTube Comment from Sketchi7306:

   “The only way Intel can compete in AI is if they magically increase their production… Which I don’t see it being anywhere near… AMD, that’s a different question, because their chips’ performance is way better with better consumption results when compared to what Intel has to offer… As of now, NVIDIA is still miles ahead.”

   

Quote Of The Week

“Innovation distinguishes between a leader and a follower.”

-Former Apple CEO, Steve Jobs

Feel free send feedback or further input on the poll question to [email protected] or [email protected]. We would love to hear from you!