Gene Munster, Deepwater Asset Management managing partner, joins 'Squawk Box' to discuss Apple's stock performance, Trump-tech relationship, the idea of 'state-sponsored capitalism', and more.

Apple is anticipated to be a leading performer among the so-called 'Magnificent Seven' tech stocks in the coming year, according to Deepwater Asset Management's Gene Munster. He notes that recent data shows a reacceleration in iPhone sales, with expectations for continued growth, particularly with the release of a new iPhone model aimed at the mid-tier market. Munster also expresses optimism about Apple's approach to artificial intelligence, despite concerns that its privacy-first stance could limit its AI capabilities.

The discussion also touches on broader challenges facing US tech companies, including new export taxes and the impact of state-sponsored capitalism, particularly in relation to China. While these policies could affect companies like Apple and NVIDIA, the consensus is that tech firms will continue to act in their own best interests, navigating evolving geopolitical and economic landscapes.

Why Apple may be a top two performing 'Mag 7' over the next year

Let's talk more about more about Apple and other tech stocks as the Nasdaq remains near record highs yours now deep water asset Management's gene Munster still waters run deep Okay Right on Joe Right. You've heard that so you are David the the latest you just heard us. Sorry about Apple Apple's had a Nice rebound. Do you expect that to continue? I Do Joe and ultimately it's going to come down to growth rate next year streets looking for 5% just on this upgrade pool. We've talked a long time the last three years about this massive pool that came in 2021 iPhone surged up 37% a year ago I was predicting a super cycle and I define that as iPhone growth going from flattish to plus 10% In fact, it's going to end that period up about 2% so I was wrong on that but one thing that we started to see in the June quarter is that the iPhone started to Reaccelerate going from up a couple percent in March to adjusting for the pull forward and tariffs It was up about 10% and there was nothing significant that came out in the product What it was was that upgrade pool from a couple years ago now I understand that this is not exciting to talk about but in the substance of this again comes down to is Apple in a better place to exceed expectations, and I think the answer is Absolutely, and then keep in mind too is that we're probably gonna see this new iPhone air Next September. This is not going to be their premier phone But it's going to be something that is going to appeal to kind of that $800 price something a little bit more aesthetic thinner phone lighter phone and Typically when they come up with a new hardware piece that has a positive impact on growth and so I'm optimistic one last point Joe, of course is that what's going on with AI and Some of the the hardships that Apple has had here Wall Street Journal Tim Higgins has a nice piece today He talks about that Apple's just in a tough spot when it comes to AI effectively their privacy first Position limits what they can do ultimately with AI and I tend to have a different view on that I think that they have a ton of information that they still can use and create unique insights around AI and and I'm optimistic about what they're gonna show next year So bar is very low is the punchline when it comes to AI and I think when you put all this together I think Apple is going to be one of the top two performing mag sevens over the next year Really? Okay. Do you just on a broader issue and we were talking about the Tim Cook in the Oval Office and The way things are I don't know if you can extrapolate but but things are different in the way things are being done They journal as a piece now now President Trump wants an export tax To and it talks the front page piece about what Jensen Wong was faced with he thought you know You could do this this and that and maybe you'd get the go-ahead to sell some chips in China And it finally came down to almost what looks like an export tax on NVIDIA do you have any problem with I mean all tech companies Apple's had its own issues with what it's allowed to do Or it's not allowed to do with China. Is this the right way to handle it? You think gene is it is it in? You know, is it a sponsored capitalism? What is it? Yes this that phrase state-sponsored capitalism I mean that that obviously catches my attention and has been kind of the center focus here and and my sense is that You know the playbook is different and You know, I want to step outside of the political appreciate you and Andrews conversation earlier But just stay outside of the politics here is The reality is this is where the ball lies is that there is this text my question is Do companies ultimately like Tesla and Apple get wrapped up in this and this has been focused obviously an AMD NVIDIA Some of the other chip players may be involved in this 15% revenue share state-sponsored capitalism But I wonder if it ends up kind of expanding from that I think it does set a unique precedence something that personally I don't I don't like that I think that companies should just kind of do what they want to do But I think from the perspective of NVIDIA to have the White House as one of your backers I mean, it's that's a powerful. It's a powerful ally and in some respects. It's 15% of 15% that's another piece to keep in mind here That we got to run but the piece that I I'm with you on the longer-term implications I don't know if you're Jensen what you're supposed to do when the president says to you 15% if he says no If he says I think no for the greater good because I don't want Apple or Tesla or others to get wound into this whole Larger geopolitical debate it is possible. I would imagine that China at some point says no We're not doing this with any of these companies anymore because you're not really your own your this is not a capitalistic system These companies are all part of some kind of u.s. Backed operation and if that happens You know the whole ecosystem breaks but I don't know if you're Jensen or one individual whether you can be the one to stand up and say I'm not doing this Because you think at least in the short term. This is actually a very powerful thing to do. I Think he does have the power to do that I mean his chips are basically powering the world where the world is going effectively And so I think it's always one one one Center of a North Star for me is people act in their best interests, and I think we see that today

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