A summary of this week’s best articles. Follow us on Twitter (@INTRINSICINV) for similar ongoing posts and shares.
Apple Watch Is Already a $10 Billion Business (Neil Cybart, @neilcybart, Above Avalon)
Many pundits have called the Apple Watch a flop. If you look at the Watch in isolation and evaluate it as an stand-alone business, you might call it a unicorn, and not a flop! Explicit numbers on the Watch haven’t been released, but it’s estimated that the Watch has generated approximately $6 billion in revenue. If you use the price/revenue of other similar firms, such as Fitbit, and adjust for the Apple Watch outlook to extrapolate the value of Apple Watch you arrive at a $10 billion valuation.
From not working to neural networking (The Economist)
Artificial Intelligence (AI) has had a very slow start. It’s been a long 50+ years since the release of the 1956 research proposal to develop AI. Over the past few years, the abilities of AI have increased dramatically. One contributor to this development was the ImageNet Challenge. This contest encouraged participants to develop an AI that could learn an object through a labeled picture, then identify that image in an unlabeled picture. Humans have a success rate of 95%. In 2011, an AI could accurately identify an image 72% of the time. As of 2015, AI has now surpassed human ability. It can recognize and correctly identify an image ~96% of the time. This jump in success is mainly due to the use of Artificial Neural Networks (ANN). These networks are modeled after the neurons of the brain, but replicated in software. The more simulated neurons, the AI has the better results it can produce.
Tony Blair: Brexit’s Stunning Coup (Tony Blair, @tonyblairoffice, NYT)
Politics aside, this perspective from the former prime minister of the UK is worth a read.
Some Thoughts On Brexit (Fred Wilson, @fredwilson, AVC)
One approach to the aftermath of news like Brexit… “It is important on days like today to remember that change creates opportunity and opportunity can create wealth if approached correctly.”
Ensemble Capital’s clients own shares of Apple (AAPL).
For more information about positions owned by Ensemble Capital on behalf of clients as well as additional disclosure information related to this post, please CLICK HERE.
While we do not accept public comments on this blog for compliance reasons, we encourage readers to contact us with their thoughts.
Past performance is no guarantee of future results. All investments in securities carry risks, including the risk of losing one’s entire investment. The opinions expressed within this blog post are as of the date of publication and are provided for informational purposes only. Content will not be updated after publication and should not be considered current after the publication date. All opinions are subject to change without notice and due to changes in the market or economic conditions may not necessarily come to pass. Nothing contained herein should be construed as a comprehensive statement of the matters discussed, considered investment, financial, legal, or tax advice, or a recommendation to buy or sell any securities, and no investment decision should be made based solely on any information provided herein. Links to third party content are included for convenience only, we do not endorse, sponsor, or recommend any of the third parties or their websites and do not guarantee the adequacy of information contained within their websites. Please follow the link above for additional disclosure information.