Cramer: Why Apple's Vision Pro could contribute to earnings sooner than expected

Published Fri, May 3 20243:11 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

One big question has hung over the Vision Pro since Apple launched the powerful mixed-reality headset in February: Who can afford the $3,499 price tag? The tech giant on Thursday made its answer clear: businesses. More than half of the companies in the Fortune 100 have bought Vision Pros and "are exploring innovative ways to use it do things that weren't possible before," Apple CEO Tim Cook said during the post-earnings call with investors. "I see enormous opportunity in the enterprise," Cook said Thursday — echoing a view we laid out earlier this year after fellow Club holding Nvidia made its 3D graphics platform used by companies to do industrial simulations, known as Omniverse, compatible with the Vision Pro. Apple did not disclose revenue for the Vision Pro, the company's first new major device since the Apple Watch debuted in 2015. Wall Street analysts agree that the Vision Pro will not be a financial needle mover right away for Apple, which generated more than $380 billion in revenue in its most recent fiscal year. The muted outlook stems partly from a lack of consumer adoption for mixed-reality headsets, including Club holding Meta Platform's much cheaper Quest devices. Business use could change all that. "The Vision Pro .... is something that's going to be very big business to business," Jim Cramer said Friday on CNBC, referencing his conversation with Cook on Thursday night. Jim said Cook was "very clear" that orders for the Vision Pro from businesses will continue to grow. The Vision Pro is generally considered a higher-quality product than rival devices, with its sharper resolution as one key advantage. Even so, the number of people willing to pay thousands of dollars for a first-generation product with a limited app ecosystem is unlikely to be large. Consumer buyers may grow as more affordable iterations are developed. Until then, the Vision Pro was mostly viewed as a curious sideshow to investors, who are more concerned about the rocky trajectory of iPhone sales and Apple's strategy around generative artificial intelligence. Jim, however, said the Vision Pro could be a positive contributor to Apple's earnings much sooner than others expect, as enterprise adoption drives more sales. Not only can businesses better afford the headsets, but the technological capabilities of the immersive device can save time and money, particularly when paired with Nvidia's Omniverse software to enable collaboration and design. Early corporate customers using the Vision Pro include the Dutch airline KLM, which is conducting aircraft engine maintenance training for employees with the headset, Cook said. Lowe's is using Vision Pro for immersive kitchen design, while Porsche is using it for "real-time team collaboration for racing," Cook said. On the Club's Morning Meeting on Friday, Jim said Cook also told him about multiple healthcare uses for the Vision Pro. For its part, Nvidia has long touted the benefits that its Omniverse platform can bring to businesses, arguing that creating realistic digital versions of the physical world and running simulations there can cut down on waste and deliver efficiencies. In an interview with Jim in 2021 , Nvidia CEO Jensen Huang pointed to use cases such as generating digital factories and logistics networks. Nvidia likes to call such creations "digital twins," and has continued to make them a point of discussion in the years since that interview. That included Huang's keynote in March at Nvidia's much-hyped GTC conference when the Omniverse-Vision Pro tie-up was disclosed. Jim has since grown more excited about Vision Pro finding a home in the corporate world. He said Friday that Apple's developer conference in June — where more details on its AI strategy are widely expected — will also highlight new software programs written for the Vision Pro. (Jim Cramer's Charitable Trust is long AAPL, NVDA and META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A person wears Vision Pro headset the product release at the Apple Store in New York City on February 2, 2024.

Angela Weiss | AFP | Getty Images

One big question has hung over the Vision Pro since Apple launched the powerful mixed-reality headset in February: Who can afford the $3,499 price tag?

The tech giant on Thursday made its answer clear: businesses.