Displaying items by tag: Apple

(San Francisco)

Investors have made cash the only thing that matters in markets. The Dollar is surging and investors are fleeing assets in favor of cash. Cash is a scarce and valuable asset in this downturn, and which companies have a ton of it—tech companies. While the Silicon Valley giants will take a hit from lower consumer spending, the reality is that the shutdown of normal life is pushing things ever more online—their domain. As this crisis eventually abates, giants like Apple, Microsoft, Google, and Amazon, have huge cash reserves (currently $350 bn) that will help them attract shareholder capital, and also grab market share as competition gets weeded out.


FINSUM: Tech is probably going to be in a stronger position in a year than it was six weeks ago. Their fortress balance sheets will be key.

Published in Eq: Tech
Wednesday, 04 March 2020 09:04

Why Apple is a Fantastic Buy

(San Francisco)

Apple has been deeply wounded by the coronavirus panic. The stock fell as much as 16.5% through the weekend before good gains on Monday. The reality is that this is great time to buy Apple, as shares are offering a big discount just before the next iPhone super cycle begins. According to Wedbush, a leading Apple analyst (and referencing the coronavirus sell-off), “we believe this will be short lived as the longer term 5G super cycle thesis and services re-rating remain the crux of our bull thesis on Apple for the next 12 to 18 months.” Wedbush believes that some 350m of the nearly one billion iPhones out there are “in a window of an upgrade opportunity”.


FINSUM: Apple has a good shot at selling over 200m iPhones in the 12 months starting September 2020, likely breaking its highest sales ever. This is a good time to get ahead of that.

Published in Eq: Tech
Tuesday, 25 February 2020 08:27

Apple May Be at Risk of Sustained Downturn

(San Francisco)

Apple’s stock has suffered significantly last week since it announced that it would likely miss its revenue targets because of the virus outbreak in China. The stock is down 7% since the announcement and there is increasing speculation the damage may not be transient. The whole incident calls into question whether the country is too reliant on China for production (and also for sales). Many Wall Street analysts have pushed lost revenue for this quarter into other quarters, but it is not at all inconceivable to think that some of the sales may be lost permanently as consumers could have bought rival products, or just won’t switch at all (especially those in China).


FINSUM: Apple should probably work to adjust its supply chain as a reaction to this, but that seems unlikely. Hard to tell how this plays out; it depends on the news cycle.

Published in Eq: Tech

(San Francisco)

In many ways the coronavirus just became real for stock markets. Up to this point, fears about how the virus might impact the economy and stocks seemed esoteric and intangible. Then this happened: Apple warned that it would miss its quarterly revenue target because of coronavirus. It is having trouble producing phones because of unstaffed Chinese factories. Accordingly, the company announced “iPhone supply shortages will temporarily affect revenues worldwide”.


FINSUM: This is when the rubber meets the road and it becomes much easier to see how this virus could cause a global recession. The engine of the world (China) is sputtering.

Published in Eq: Tech
Thursday, 23 January 2020 12:18

It is Time to Short Apple

(San Francisco)

Barron’s has featured a very eye-opening call. The argument comes from the CIO of Ariel Investments. She argues that it is time to short Apple. Referring to the company as the “blue chip of yesterday”, she contends that Apple is not a tech company, but a consumer electronics one, and that whether its new products are a hit has a huge impact on revenue. It is trying to pivot to services, but it has no first mover’s or any other natural advantage in doing so and is competing with big names like Netflix and Disney. It is even behind competitors in its core iPhone business and trying to catch up. She argues that a blue chip of yesterday is the worst kind of stock because all the good news is priced in, but none of the bad news is.


FINSUM: This is quite a stark portrayal of Apple. While we do not completely agree, there is some significant truth to this argument and it warrants concern.

Published in Eq: Tech
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