Tom Lee Sees Upside, Apple’s New CEO

In this episode of The Compound and Friends, hosts Downtown Josh Brown and Michael discuss the historic transition at Apple following Tim Cook's announcement of stepping down after 15 years as CEO. They reflect on Cook's remarkable legacy—growing Apple’s market cap from $377 billion to $4 trillion, a 11X increase—while highlighting his operational excellence and user-centric leadership style. The focus then shifts to John Ternus, Cook’s handpicked successor, praised for his obsessive attention to detail and decisive leadership, seen as a potential shift toward a more visionary, Steve Jobs-like approach. The hosts debate whether this marks a fundamental pivot or continuity, noting Apple’s recent struggles with innovation and bureaucracy. The conversation expands to broader market themes, including Tom Lee’s bullish outlook on a potential 18–24 month rally fueled by earnings growth and multiple expansion, especially in tech. They analyze the current market’s resilience despite a buyback blackout and weak tax-season sentiment, attributing the rally to FOMO and a lack of fear. The episode also covers earnings from Netflix (down 9% post-report despite strong revenue) and Schwab (record results but stock decline due to AI disruption fears), as well as a powerful case for small-cap stocks, particularly microcaps, which have surged 75% over the past year. The show closes with a spotlight on Caterpillar, a standout performer with a parabolic chart and strong technicals, symbolizing long-term momentum in industrials. Key takeaways include: (1) Tim Cook’s legacy is unparalleled in market cap growth, (2) John Ternus represents a potential shift toward bolder, more decisive leadership at Apple, (3) The market may be entering a rare 18–24 month bull phase driven by AI and rate-cut expectations, (4) Small and micro-cap stocks are outperforming, signaling a shift from mega-cap dominance, and (5) FOMO is now the dominant market emotion, overriding traditional risk aversion. The overall sentiment is highly positive, reflecting confidence in market resilience, structural shifts in tech and finance, and the power of long-term compounding.