Apple’s CEO Tim Cook is set to become Executive Chairman effective from 1 September 2026, with John Ternus moving into the CEO position from senior vice president of Hardware Engineering.
The transition follows a “thoughtful, long‑term succession planning process” and was, unanimously approved by the board. Cook will continue to serve as CEO through the summer, working closely with Ternus to ensure continuity.
Ternus has spent more than two decades at Apple and currently oversees hardware engineering across core product lines, including iPhone, iPad, Mac and wearables.
The shares were down 0.6% in pre-market trading.
Our view
Apple’s CEO transition has been telegraphed for some time, even if the timing has come a touch sooner than we expected. In our view, picking a hardware veteran makes total sense and points to a smooth handover at a pivotal point for the company, with the next chapter likely to be driven by how well Apple integrates AI into existing and new devices.
Back to business, it’s remarkable how a successful iPhone launch can shift sentiment. The narrative around Apple has quickly shifted from concerns about its AI strategy to excitement over strong iPhone demand, and renewed hopes that 2026 will finally deliver a truly compelling AI product.
We’ll hold up our hands. The latest iPhone has been more successful than we thought. It’s not a game-changing product, but there were enough new features to give people a reason to upgrade. Apple’s brand is acting as a strong catalyst for now, but we believe innovation needs to come sooner rather than later.
AI offers a solution on paper, but Apple hasn’t been able to adapt quickly enough. Apple Intelligence is a country mile from the ‘wow’ experience that was promised. Hopes are now tied to an AI-powered Siri and broader AI integration across Apple’s ecosystem. A new partnership with Google to use Gemini increases the chances of success, but it still has to execute.
Services growth is likely to remain a key profit driver. This part of the business is higher margin, as adding users doesn’t carry the same costs as building a MacBook or iPhone. But for Services to reach its full potential, it still depends on growing hardware sales.
Strong China sales and semi-stable US-China tensions are encouraging, too, but Apple needs to reduce its manufacturing dependence on the region. India, Vietnam, and the US are key to that shift, and credit to Tim Cook, often criticised for a lack of innovation, he is a master of supply chain management.
The flip side of Apple’s lack of aggressive AI investment is that its financials are rock-solid. Free cash flow is abundant, enabling it to aggressively buy back its own shares. This should not be underestimated, as it offers a diversification avenue compared to most of its big tech peers.
All in, the change in leadership looks orderly rather than disruptive, and demand for Apple’s devices looks strong enough to buy management time as it works to turn AI integration into the next meaningful growth driver. That said, we think the valuation already reflects many of Apple’s core strengths, adding pressure to deliver a successful AI strategy.
Apple key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.