Cook Leaves Ternus a Perfect Storm of Rising Prices and Unaffordable Stock

Apple CEO Tim Cook is stepping down on September 1 and passing the reins to John Ternus, but he's leaving him a significant challenge. The company is facing rising commodity prices, which could have severe effects on its business.

Cook noted during his last earnings call that memory chip prices are undergoing a '100-year flood,' and Apple has already had to raise prices on some products. This may not be enough, as the company's stock is priced for perfection at 35 times earnings, which is unsustainable given zero growth in the current fiscal year.

The situation is further complicated by the fact that Apple's competitors are growing at a much faster pace. For example, Nvidia is expanding at an impressive 85% year-over-year rate, and its stock trades for 34 times trailing earnings. Meanwhile, the S&P 500 trades at a more modest 25.2 times trailing earnings.

As Ternus takes over as CEO, he'll face significant challenges in navigating this complex landscape and finding ways to offset rising memory chip prices without alienating Apple's consumer base.