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The Bear Case For Apple

You’ve heard every reason in the world why Apple should go higher; here’s what all those Apple bulls are missing.

According to Bernstein analyst and Fast Money friend Toni Sacconaghi 5 things could go terribly wrong.

They follow:

(1) Apple's market cap is too large for it to outperform, and its image has migrated from underdog to Silicon Valley bully, which will increasingly pit competitors against it.

(2) Increased regulatory scrutiny threatens to undermine Apple's powerful iOS ecosystem.

(3) Sustained growth in iPhones will inevitably lead to margin pressure.

(4) Near-term expectations for iPhone and iPad units are getting heady, risking disappointment.

(5) Apple insistence on retaining cash points to a risk of the company squandering it on a flawed acquisition.

Now it’s important to note that these are potential catalysts that could drag down the stock – Sacconaghi isn’t saying they necessarily will.

In fact, Sacconaghi currently has an ‘Outperform’ rating on the stock with a $300 price target.

But he’s concerned that since Apple is now the biggest tech company by market cap history isn’t on Apple’s side.

Both Microsoft and Cisco underperformed the Nasdaq upon becoming the largest tech companies by market cap in 1997 and 2000, respectively, Sacconaghi notes.


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Trader disclosure: On June 28, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (INTC); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova owns (IPSU), (BX), (AGU), (PFE), (TER), (GMCR), (RSX), (TER), (AXP), (KO), (KR), (COST), (AMZN), (TEVA), (BMO), (DIS), (XCO), (SWN), (GMCR), (IPI), (SU), (XOM), (RDS.A), (COP), (OXY), (V), (FXB): Terranova owns (GLD) July 120 puts; Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Kelly is short (GS); Jon Najarian owns (AAPL) call spreads; Jon Najarian owns (MU) call spreads; Jon Najarian owns (SNDK) call spreads; Jon Najarian owns a seat and stock in (CME); Jon Najarian owns a seat and stock in (CBOE); Jon Najarian owns a seat and stock in (NYX)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
Virtus Investment Partners owns more than 1% of (IGE)
Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (DRYS)

For Brian Kelly
Accounts managed by Kanundrum Capital own (AUY)
Accounts managed by Kanundrum Capital own (GFI)
Accounts managed by Kanundrum Capital own (GDX)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own Gold
Accounts managed by Kanundrum Capital own Treasuries

Accounts managed by Kanundrum Capital own US Dollars
Accounts managed by Kanundrum Capital is short (AMZN)
Accounts managed by Kanundrum Capital is short (RCL)
Accounts managed by Kanundrum Capital is short (XLY)
Accounts managed by Kanundrum Capital is short (XLE)
Accounts managed by Kanundrum Capital is short (AFL)
Accounts managed by Kanundrum Capital is short (CME)
Accounts managed by Kanundrum Capital is short (EWI)
Accounts managed by Kanundrum Capital is short (EWO)
Accounts managed by Kanundrum Capital is short (GS)
Accounts managed by Kanundrum Capital is short (HIG)
Accounts managed by Kanundrum Capital is short (RKH)
Accounts managed by Kanundrum Capital is short (XLF)
Accounts managed by Kanundrum Capital is short (XLI)
Accounts managed by Kanundrum Capital is short (FCX
Accounts managed by Kanundrum Capital is short (GFI)
Accounts managed by Kanundrum Capital is short (JOYG)

Accounts managed by Kanundrum Capital is short (XLB)
Accounts managed by Kanundrum Capital is short (XLK)

Mike Khouw
Cantor Fitzgerald makes a market in (MON)
Cantor Fitzgerald makes a market in (FWLT)
Cantor Fitzgerald makes a market in (AAPL)

Cantor Fitzgerald makes a market in (RIMM)
Cantor Fitzgerald makes a market in (QCOM)
Cantor Fitzgerald makes a market in (STX)
Cantor Fitzgerald makes a market in (SNDK)
Cantor Fitzgerald makes a market in (MGM)
Cantor Fitzgerald makes a market in (WYNN)
Cantor Fitzgerald makes a market in (LVS)
Cantor Fitzgerald makes a market in (PFCB)

David Levy
Levy owns Treasuries

Toni Sacconaghi
Sacconaghi owns (PLMO)
Sacconaghi owns (STX)



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