As Tim Cook Steps Aside, What's Next for Apple?

In this episode of Motley Fool Money, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

• Tim Cook and his accomplishments at Apple.
• Apple's new CEO and what his biggest challenges are.
• Whether the S&P 500 will include SpaceX after it goes public.
• AST SpaceMobile and its opportunities.

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A full transcript is below.

This podcast was recorded on April 21, 2026.

Tyler Crowe: Apple is about to get new leadership. This is Motley Fool Money. Welcome to Motley Fool Money. I'm Tyler Crowe, and today I'm joined by longtime Fool contributors Matt Frankel and Lou Whiteman. We've been asking for questions from listeners all along. First, thanks to everyone who's been sitting. We love it, and we're getting a ton of them. We're going to actually tackle a couple of mailbag questions today related to the SpaceX IPO and our thoughts on AST SpaceMobile.

But first, we want to discuss the big news that came out yesterday, and that Tim Cook is stepping down. Yesterday, Apple announced a transition plan where Cook will become the executive chairman of Apple, and John Ternus, who was the head of engineering for hardware, will take over for the CEO role starting in September. Now, I'm not going to say this came completely out of the blue. Cook had been the CEO for close to 16 years, and he was in operating roles at the company since the dotcom days. There were some bread crumbs that Ternus would be the next in line. For a company that seems like a rock of stability, it had quite a few retirements and transitions in the C suite over the past year, and less than a month ago, there was a long Bloomberg article published that was talking about Ternus being the heir apparent. Now, we're not eulogizing Cook here, but as we think about Apple under Tim Cook's leadership, what do you see as his lasting legacy, Lou?

Lou Whiteman: Stability. He kept the plane on course. Simple as that.

Matt Frankel: Aside from the stock price performance, which I'm sure we'll talk about more in a little bit, he had some pretty decent achievements, and I think he'll be remembered as a highly effective CEO. Just looking at what he accomplished. Apple's profits are up about 700% since he took over. He's known for stability, like Lou said. He took the existing products, the iPhone, the iPad that were successes before he took over, and they're still successful. But also, he made Apple into the leading wearables Smart wearables company with the Apple Watch and AirPods that launched under his watch. They're not just handheld electronics anymore, but I think the most significant part of his legacy is the growth of Apple's service business, which is now the most profitable part of the company.

Under Cook's leadership, Apple built some highly successful subscription products. They were still on iTunes, like pay-for-a-song business model when he took over, and he led the Apple Music thing, for example. Apple now has more than 1 billion paid subscriptions throughout its ecosystem. Service revenue was about 5% of the business when Cook took over. It's more than 25% today. It's not all positive. He has the legacy of being behind the curve of AI innovation. That's, in my mind, one of the biggest challenges for new leadership. But in all, I think he was a very effective CEO.

Tyler Crowe: On that profits going up thing, since Tim Cook took over, it was September of 2011, shares of Apple on a total return basis has generated about 3,100% returns for investors, compared to 731% for the S&P 500 on a total return basis. Absolutely speaking, Cook's tenure has been a resounding success for anyone invested in the company. One thing we can say about Apple under Cook, it's been an outstanding operator. That's not really surprising. He came from the operations side. Do you think about supply chain management, as Lou, you said, keeping the things steady, keeping the trains running on time has been really Cook's strongest suit.

But I think if there was a mild critique, and I know, Matt, you highlighted the wearables and the service revenue and stuff like that, I would say the critique that a lot of people have had of Apple over the years, despite all of the success. Not everyone can be happy, right? There was this mild grumbling that, some of its more recent developments and progress were like incremental gains instead of, like, these revolutionary products like we had with the iPhone and the iPhone was by all accounts, a resounding success that transformed the way we think about, mobile, everything like that. Part of this is assuming that when we're bringing in a hardware, an engineering guy, somebody really deep in the design, bringing new products to the fore, is this a sign where you guys think Apple is going to be going with Ternus here?

Lou Whiteman: I think the markets are hoping so. Look, that's what Steve Jobs taught us to expect that one more thing. That was all of us, the legacy of Apple was. They do these great presentations. They tell you what you already know, and then surprise you or wow you with some innovation. That has been missing from the business for the last decade plus. People have looked at whether it's the car or whether it's, you know, all things. Apple TV, Apple car, all of these great inventions and all of these wonderful stories we've told ourselves in our head of how they were just going to do for some other product, what they already had done with the iPhone.

They haven't done that, and yes, in theory, bringing in a hardware guy could change this, but let's be honest. Ternus has been the president of hardware for five years. To imply that he was sitting on some new innovation, some new wow, some new product category that is just going to blow us away, that implies either he was sabotaging Tim Cook or Tim Cook was keeping Ternus and his team from rolling the new stuff out. I don't think that's the case. I don't think investors should get their hopes up that just because there's a hardware person in charge, that there's going to be a new iPhone or a new category killer, I think those are really, really hard and maybe back to Matt services, we should accept Apple for what it is and not really get our hopes up that there is some great next big thing right around the corner.

Matt Frankel: First of all, I'm glad Apple ended up not trying to build its own car. I think that would have ended up being a misstep if they really leaned into that. Remember they were supposed to launch their own Smart TV, too. That was another big rumor that never ended up panning out. I really see the AI catch up as the biggest opportunity/Challenge for new management. I agree that another blockbuster product would certainly be a needle mover, but getting the AI strategy right could be just as big for iPhone and iPad sales. One good thing, and this ties into Ternus' hardware focus, is that Apple has focused quite a bit of its efforts on on-device AI as opposed to the costly cloud infrastructure everyone else is investing in. This, in particular, could lead to more frequent upgrades if they lean into that. If people are upgrading their iPhones twice as fast, that's just as big as a new product launch.

Lou Whiteman: On AI, it's funny because I do think they stubbed their toe. I do think they tried to build this model, and it didn't it's giving them a pass to say, oh, Apple just waits for other people to figure out, and then makes it better. But I think this works out very well for them. I don't know if the value is really going to be in the model makers, and so their model failed. They have the customer and Matt's right. To the extent that they can figure out to get AI onto the device of customers, they will have no problem finding an AI that will partner with them. They just need to figure out the device. Then, honestly, I think having the customer is more valuable than having the model in two years.

Tyler Crowe: Not for nothing, too, and we just saw this say throwing a little extra curveball at Apple at the same time here. I don't know if you guys saw this, but the European Union put out some new regulations saying, basically, you can't have obsolescence with a lot of devices, and basically you're going to have to have replaceable batteries in iPhones. I don't know about you guys, but I've definitely had to replace iPhones from time to time because of battery replacement. Maybe just a little extra curveball. I don't know how much that's going to really move the needle or change the bottom line for Apple because, look, they're going to sell their products pretty much anyway. But something like that, European Union always seems to be adding some extra regulations to throw a wrench in things. After the break, we are going to get into the mailbag.

Hey, so just a quick reminder, as we said, we're getting a ton of mailbag questions. Thank you for that, and we want to keep it going. If you have questions for us, please send them into podcast at fool.com, and we'll try to answer them on air. You can ask most anything related to investing. All we do is ask you to keep it foolish. One thing I have learned from reading everyone's emails and questions so far, try to keep it short so we can actually read it on air. We've gotten some pretty long ones. It's a little bit hard to manage that into our time space.

I'm going to ask a question here. This is an email from one of our readers, and it's encapsulation of about four or five emails that we've gotten in the past couple of days. I thought this was the most succinct one that we could do with it. This comes from Garrett Campbell. He asked, I heard that the S&P 500 is considering a rule change to allow SpaceX to join without meeting the traditional requirements for the index. I'm not knowledgeable on the IPO process and how shares become public, and who owns them. Can you discuss the pros and cons with granting an exception and allowing SpaceX to join the S&P 500 once it's public? Thanks from Garrett. Just to give some context here before you guys, answer this question, the S&P 500 doesn't mean the 500 largest companies. There is actually some criteria, and there's an index committee that selects them. It has to be a C corporation. It has to be sufficiently large. It has to have enough liquidity, which meaning there's enough shares for people to buy, and it has to show positive net income using generally accepted accounting principles, what we call GAAP, in the most recent quarter and cumulatively over the past four.

Now, we don't know SpaceX's financials right now because it hasn't filed the IPO prospectus, but with xAI and the X that used to be Twitter, I think everyone's kind of assuming that it's not necessarily GAAP profitable today. With that in the background and all that, Lou, why are so many people throwing a stink about this exception for the S&P 500?

Lou Whiteman: So, people don't like rule changes, Tyler. People want you to follow the rules. Let's be honest, if the S&P 500 does this, it will be landmark. It will be something. NASDAQ, I think, will waive its requirements and probably some of the other index products, too. But the S&P 500 doesn't tend to change its rules, and the rules say you have to public for a year, that. But look, there are obvious reasons for SpaceX to want this. Opening up the S&P 500 and the other indexes would create billions in forced buyers to help sustain the valuation, maybe even grow the valuation. I actually think there's a decent argument for why we should want this, too. I get the downside, but the rules around IPOs weren't designed for $2 trillion companies. They were designed for start-ups and small companies that had to earn their way into the big time. I think I can at least make a case that not having one of the world's biggest publicly traded companies in the index of big publicly traded companies is wrong. Is not what we were supposed to see. If they don't waive the rules, I could argue, it makes the S&P 500 maybe less reflective of the overall market, and that's not what people want.

Matt Frankel: To Lou’s point, if SpaceX were to be added to the S&P 500 on day one, assuming that it holds that $2 trillion valuation, it would account for almost 3% of the index's weight all by itself. He's right. It would make the index less reflective of the overall market. There are reasons why it shouldn't happen from day one as well, not just because it's the rule. For one thing, there might not be enough stock to trade available from the start. Tyler mentioned that you have to have a certain level of liquidity. SpaceX is talking about raising what 90-ish billion dollars? But the big index fund players would have to amass, and I'm being conservative here, a 20% plus stake if it were included in the S&P right away. At the very least, I can't see SpaceX being allowed to be included until at least any lockup periods, if there are any happen to be over.

Tyler Crowe: The $90-ish billion, I think a lot of people think about that and they hear, That's a ton of money to raise. But when you're looking at a $2 trillion valuation, that's less than 10% of the entire available share available in this company. By that definition of sufficient liquidity, enough float, you start to squint at that and be like, it's 90 billion, but it's not a lot of the float of the company. To this point, I think this is why so many people think this is important. Thirty percent of all assets under management in the top 100 ETFs in the market today are just allocated to the S&P 500. By far and away, the most money in ETFs is in S&P 500. If there was a race between the NASDAQ, the Dow, and the S&P 500, S&P 500 ran laps around everybody else. It's about $2.8 trillion in passive S&P 500 index ETFs alone. We're talking about a lot of portfolio shuffling if this happens right away, and if my memory serves me correctly, Tesla, back when it was way, way bigger than a lot of the companies in the S&P 500, it took them quite a few years to get into the S&P 500 for that very reason that it wasn't profitable.

Lou Whiteman: I'll say this, Tyler, too. Whatever we decide here, we have to decide it fast because we have Anthropic, maybe OpenAI waiting in the wings. Again, I don't think the IPO rules ever envision companies of this size going public. I think we have to decide one way or the other how we're going to deal with this and let people adjust because it is going to ripple through the markets, through the index funds, and definitely impact these stocks as they come.

Tyler Crowe: We got those two. We got Databricks. We got some space companies that are coming public, and I can almost guarantee they're going to be large enough to have S&P 500 considerations. Speaking of space, we're going to do another mailbag question coming up after the break. As we mentioned, we're going to get into the mailbag one more time. Hey, if you have questions again, I want to remind everyone if you want to ask, send your emails to podcasts@fool.com, and we'll try to get them answered on air. Again, that's podcast@fool.com.

This next question comes in from Kalate Aahkola. Great name, by the way, for investing podcast. He who is surrounded by wealth. That's awesome name when it comes to investing. I love it. Here's the question is, I want to ask your opinion on AST SpaceMobile. The ticker is ASTS as a business in the space industry. According to Code, he says, their technology appears to be superior in the D2D space compared to SpaceX's Starlink or Amazon's Low Earth Orbit. They've also partnered with multiple MNOs, and business looks good on paper. Please share your honest opinion about the stock and any potential risks investing. Thank you, Kalade.

I wanted to tackle this question today, specifically of all the email questions that we've had because AST Space was actually in the news recently because Blue Origin, they had a little ups, and they put one of AST's satellites into the wrong orbit yesterday, and they're trying to figure out whether that actually means anything. I'm going to be honest here. I am not the space guy of the three of us. I'm going to stand back, and I'm going to let you guys have the floor here. Lou, when you see AST SpaceMobile in the entire space investing landscape, what are you seeing?

Lou Whiteman: Tyler, they said they have to deorbit the satellite. I want to sugarcoat it here, but that's like when your parents said your dog went to the farm. The satellite is not of this world, unfortunately.

Tyler Crowe: No, that's what insurance is for.

Lou Whiteman: Well, that's the good news for AST is that it is insured and it isn't their fault, but it is a setback for a company trying to do this 45 to 60 times this year, so they can actually start generating revenue, which is important for business. Forget profits. Those are still years off. This is a company that is traded at a conservative 130 times future sales. Again, those future sales are assuming that they get 45 launches up and they can actually start generating revenue. They do seem to have a product that works. I don't know. I find it interesting that they are technically superior to StarLink or Amazon LEO. I don't think we know enough to know. It's definitely a little bit different. But my pushback there is that that is at least three competitors, and there's more in a market that while it exists, is second best. If your cell phone is currently getting a signal off of a tower, that's going to be the better way to do it. You have a lot of companies chasing what is a real, but limited market at sky-high valuations and a ton of CAPEX and execution risks. I think there's a lot of reason to be excited here, but I think that this is speculative at best, and I would caution anyone getting too out ahead of themselves here. There's a lot of risk here, bottom line.

Matt Frankel: Like Lou said, it's not a cheap stock. You're paying about a $31 billion market cap for essentially a pre-revenue company that has a total of $1.2 billion of revenue commitment, as far as I can tell. They do a little over 3 billion in cash, so they have the money to build out what they're trying to do. It's an interesting technology. The market opportunity is there. It's estimated that about 4 billion of the people on Earth live somewhere where cell coverage is not great. Where you can't just get a signal from a tower everywhere you go. There is the opportunity. The company expects to have its satellite constellation functionally in orbit by the end of the year and to start the broader commercial service after. There's a lot of ifs there. There's a lot that's going to need to go right. There is that real competition risk from SpaceX. There are a lot of concerns I have. If they can execute flawlessly and deliver on their vision, yes, $31 billion for this business could be cheap in retrospect. But I don't see that as the base case scenario.

Lou Whiteman: I don't know what to make of that 4 to 5 billion person number, because how many of those who don't have access right now can afford to cover AST or someone else's costs with this, which is really the hard thing about that market. Here's the other thing that gets me. Say they get it right. T-Mobile trades at what, 2.5 times sales. There is a long way to come down. Even if this works as planned, I don't know if you can justify even a fraction of the multiple. I'll tell you, Tyler, if there's an investing takeaway from this incident, and we talked about this at our member event in San Diego, there are not enough reliable launch partners right now. If you can establish yourself as a company that can reliably get things into space, you are going to succeed. Rocket Lab is booked up. SpaceX is sending its own company up Starlink. I don't want to call Blue Origin. Blue Origin has a decent track record, but there are a lot of companies that are on the cusp of establishing themselves as reliable launch providers. To the extent they get there, that looks like a better investment to me than ASTs is right now.

Tyler Crowe: Full disclosure on my personal life. I've lived in some places, we call them emerging marketplaces, that I think AST is saying where they don't have this cellular coverage whereas in create, I can say, it's not great, but it's very usable. I've been able to do a remote job from places running on a 3G dongle. It's very possible. Again, the economics of it are a little bit harder than I think they're saying. But what I'm hearing from both of you is that you're lukewarm on AST SpaceMobile. Staying in that space investing area, we'll just do a quick top it. If somebody's looking for an investment in space, what is your best idea that you have right now? Matt, you go first.

Matt Frankel: As far as my best idea in space, I have to go with Lou's Rocket Lab, although I know I just stole what he was going to say. They're not pre-very. As Lou said, they're booked up. They have a great track record of delivering. They take the time to get what they're doing right. They're not going to hit every milestone on their timetable, which they don't have to. They're doing a great job, and I think that it's still a compelling long-term opportunity.

Lou Whiteman: I'll go with the theme that I just gave here. Again, this is speculative. They're not there yet, but Firefly Aerospace, Ticker FLY, is beginning to look like they're a reliable launch partner. Again, if they get there, and I can't emphasize the INF, this is rocket science. This is hard. But if they can get there, there are going to be customers like ASTs looking to diversify, looking to get things into space. That's where I'm looking and hope they get there because all of these companies need it, not just my portfolio.

Tyler Crowe: Probably the only time on an investing podcast where we get to say, This is rocket science. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure. Please check out our show next. Thanks to our producer, Dan Boyd, and the rest of The Motley Fool team for Matt, Lou, and myself, thanks for listening, and we'll chat again soon.

Jon Quast has no position in any of the stocks mentioned. Matt Frankel, CFP has positions in Amazon and General Motors. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile, Amazon, Apple, Rocket Lab, and Tesla. The Motley Fool recommends General Motors and T-Mobile US. The Motley Fool has a disclosure policy.