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AMD Gains Graphics Market Share In Q2, Driven By Kaveri APU
- AMD gains market share, and also enters into the SSD marketplace.
- Kaveri drives market share gains, but I think that the performance advantage will be temporary.
- Broadwell CPUs for laptops should be ready over the next two quarters, which will diminish the positive impact that Kaveri has had for AMD.
Sell AMD: Traditional Markets Will Do Damage
- AMD's sales mix weakened results in its visual segment, which was in-line with my expectations.
- Further deceleration in traditional CPU/GPU market share will most likely continue.
- Broadwell will continue to diminish AMD's competitiveness in the standard CPU channel, and assuming there's further deterioration in this market, AMD's consolidated results will disappoint.
Intel Is Finally At Qualcomm's Doorstep
- Intel Broadwell M significantly improves upon power consumption and performance.
- Qualcomm has a lot of short-term solutions in store to keep Snapdragon 810 competitive with Broadwell M.
- However, the added competitive pressure definitely weighs on Qualcomm and puts Intel in a significantly better position to gain mobile wins.
Google's Acquisition Of JetPac Is A Step In The Right Direction
- Google has acquired JetPac.
- The app's advanced AI offers recommendations that are far more contextual.
- Google's acquisition spree will continue, and while JetPac isn't earth shattering, it can integrate into Google's pre-existing navigation app.
How Investors Should React To The Windows 9 Preview
- According to industry insiders a Windows 9 preview event will occur in the next two months.
- The Windows 9 preview event will confirm speculation over "One Microsoft." Basically a united ecosystem between mobile, console and desktop/laptop.
- Windows 9 may reverse projections of declining desktop/laptop shipments, which has obvious ecosystem benefits to upstream suppliers and downstream OEMs.
iPad Refresh Will Boost Shipment Figures
- Apple is experiencing an influx of new Apple iPad buyers.
- When I add the impact from refresh, assuming a three-year cycle, I expect shipment growth in excess of 50%.
- I think gen 6 iPad will be the major catalyst that causes older generation iPad owners to upgrade.
- Apple shouldn't have difficulty with beating its own guidance, assuming the combined impact from refresh and organic growth.
Groupon Looks Well Positioned; Lack Of Earnings Is A Symptom Of An Investment Year
- Mobile growth is a strong indicator for future success.
- New initiatives like genome and pages lead to cross-sell opportunities, and ecosystem benefits.
- Earnings are deflated due to an investment year.
- Free-cash-flow should improve as a result of closing non-performing segments, paired with greater economies of scale.
eBay May Have 10.2% Upside Until Year-End
- eBay has experienced difficulties with cyber attacks and competition.
- Despite these short-term difficulties, the stock is slightly undervalued and growth rates in its payment business are robust.
- I forecast that eBay will trade at $58.05 by the end of 2014, and I also believe the growth trajectory of the business is intact.
Chromebooks Won't Rule The Future
- Chromebook market share will not amount to much in the future.
- NPD sales channel figures may have over-estimated Chromebook demand, based on Gartner figures.
- Chromebook is a niche device as the device will have 1.7% global market share by year-end.
Broadwell Exceeds Expectations: Intel Remains Competitive
- Intel released details on its next generation 14nm process.
- 14nm CPUs are now in production; second gen FinFet comes with significant performance advantages.
- The reaffirmation of its product launch-cycle, paired with improving cost efficiencies on a per-transistor basis, has boosted investor confidence.
- Broadwell will secure some mobile wins on top of cementing Intel's dominance in server, desktop and laptop.
Yahoo Stakes Its Future On Programmatic Ads
- Yahoo's core display business struggles to grow.
- Yahoo thinks that it can stimulate growth through an ad-exchange, which is referred to as programmatic advertising.
- Programmatic advertising has benefited advertisers in the early stages, but as fewer publishers compete in the marketplace, I think the dynamics of pricing will no longer favor advertisers.
- Assuming Yahoo can generate both volume and higher pricing on a CPM basis, the business may recover, but it's too premature to determine that.
Sell King Digital Entertainment: It's Way Too Speculative
- King Digital's declining user engagement metrics sparked a massive sell off in the after-hours.
- It's likely that active user metrics will continue to decline, which will eventually result in declining top-line sales.
- Because the business has such unique risk factors, the business has become extremely hard to quantify.
- The added level of uncertainty will cause significant discounting, therefore investors should avoid King Digital.
Twitter Joins The Herd With Video Ads
- Twitter has launched a beta test for promoted video.
- Videos are easier to monetize, and have much higher CPM.
- This bodes well for Twitter shareholders as more efficient monetization will boost top-line revenue growth.
The Netflix Blitzkrieg - Here's What Topped HBO
- Netflix surpassed HBO's subscription revenue.
- Netflix may become more profitable than HBO as it increases the pricing of its subscription and scales the service internationally.
- Surpassing HBO is just a minor pit stop to "world domination."
Facebook: Big Business Means More Business
- Facebook diminishes its emphasis on small business ads.
- Building a greater experience demands fewer advertisers, but will require higher quality ads.
- Sustained growth in ad-pricing will sufficiently sustain revenue growth.
Putting Microsoft's Surface-Related Losses Into Perspective
- Microsoft Surface Pro lost $1.7 billion, with most of it driven by inventory-related charges.
- These problems aren't insurmountable, and while the Surface is losing money currently, the device is necessary in order for Microsoft to offer a complete product ecosystem.
- Going forward, a better managed supply chain paired with falling variable costs will allow Microsoft to at least break-even or even earn profit.
Facebook Is Serious About Unbundling
- Facebook has made it a requirement for users to download the messenger app to message friends.
- In the process, users have had quite colorful feedback.
- However, in light of Apple's upcoming smart watch launch, unbundling becomes a natural progression of Facebook's core strategy as a social company.
When It Comes To iPhone 6 Think About The Ecosystem
- Apple iPhone 6 launch event anticipated to be on September 9th.
- The iPhone 6 won't offer revolutionary features, but it will still be best in class.
- The iPhone 6 will convert more users to the Apple ecosystem and through incremental sales in other product categories Apple's growth trajectory will be maintained.
Sell Sprint And Buy SoftBank
- Sprint and T-Mobile merger won't happen.
- Sprint dilution will diminish returns significantly.
- SoftBank offers much more upside in this instance.
Zynga Could Go Both Ways: Non-Directional Trade Makes Most Sense
- Zynga lowered guidance range and reported a miss on revenue.
- Going forward further deceleration in the core business may occur, however in the unlikely event, engagement figures/revenue improves, the stock could rally significantly.
- Since no one can anticipate the direction this could go, a non-directional option trade makes the most logical sense.
Apple's Boring Quarter Still Produced A Beat
- Apple reported earnings that beat consensus analyst estimates; basic EPS of $1.29 versus estimates of $1.23.
- Apple drove bottom line performance due to higher than expected gross margins.
- This was driven by iPhone becoming a larger percentage of the sales mix.
- The quarterly earnings conference doesn’t offer meaningful guidance; investors should turn their attention to the next quarterly earnings conference.
Facebook And Google Create Natural Monopolies: Both Create Their Own Barriers Of Entry
- Google and Facebook operate monopoly-like businesses by creating businesses that create natural barriers of entry into the market.
- Being able to re-create this type of success is difficult, and it helps to explain why Google and Facebook have not been able to diversify their businesses as significantly.
- Facebook and Google have a built-in durable advantage in two new business categories (Android, WhatsApp) that are still in the early stages of rapid growth.
- Both companies have growth trajectories that are extremely sustainable given qualitative factors.
Why I'm Reiterating My Netflix Buy Rating
- Netflix retains high market share, and higher saturation of the global market should result in meaningful subscriber growth.
- On global aggregate, Netflix has plenty of room to grow, as indicated by the total number of internet users.
- The combined impact of added users, paired with better monetization per user drives revenue growth and margins.
- I believe that Netflix will fetch a market capitalization of $150 billion or so in the next five to ten years.
Raising My Price Target To $39.42 On Intel
- Intel reported earnings that were well ahead of expectations but more importantly guidance indicated that Intel may sustain the current quarter’s performance.
- After creating a pro-forma income statement using the materials from guidance, net income may grow by 14.24% year-over-year, and EPS may grow by 22% year-over-year.
- Assuming that’s the case, I’m moving my price target to $39.42.
Stratasys Trades At A Reasonable Value Despite Market Volatility
- A high P/S or P/E ratio is not necessarily indicative of a stock being overvalued.
- After doing a comparison study using Intel as a comparable benchmark, I have concluded that Stratasys, despite carrying a higher P/S ratio, should not be considered overvalued.
- I believe that if the underlying business model were to change, and through that change the growth rate were to decline even further, the valuation may contract.
- Given the growing number of applications, plus residual revenue from 3D printing, growth is highly sustainable.
5.5-Inch iPhone Will Offset iPad Cannibalization
- Apple is having added difficulty with differentiating its core product line-up.
- Despite these difficulties, I expect the iPhone 6 to have a successful launch.
- Cannibalization from a larger form factor device may be offset with the $100 price differential.
- Assuming demand for the iPad Mini declines due to the phablet, top line sales may be impacted, but gross profit will still improve.
Apple's Big Year Will Be 2015, So Here's My $120 Price Target For 2015
- Improving sentiment, share buy-backs, new product categories, and stabilizing ASPs will push Apple's stock price higher.
- Using two different methods, I have found that net income can in fact grow to $47 billion. It deviates from the historical trend line, but the reasoning is justified.
- I believe that if Apple can grow net income by 23.67% year-over-year between FY 2014 and FY 2015 the stock will trade at around $120.
Amazon Fire Needs To Sell Like Crazy Because App Sales Won't Cut It
- Even if Amazon lowers prices on its phone, the company will not break even.
- This is because application revenue will have an insignificant impact on Amazon's bottom line.
- I estimate that losses will exceed a billion dollars, regardless of what Amazon does from this point forward.
Twitter Jumps On Low Hanging Fruit - Features, Features, Features
- Twitter is experimenting with longer Twitter posts, and may extend the length to 280 characters.
- The extended length may help in conversations where people "retweet" comments.
- Assuming that's the case, average engagement per user may improve, which directly boosts ad revenue.
Apple's iWatch May Have A 37% Net Profit Margin
- The criticism towards Apple's new product category is unwarranted.
- Apple should have no problem with clearing 50 million in iWatch inventory.
- I estimate that the iWatch will have a 36.74% net profit margin, and $5.5 billion contribution to net income.
Netflix Has A Future: Here Are 4 Reasons Why
- Netflix's business model has further room to grow, as market saturation is unlikely based on the number of internet users globally.
- Netflix’s subscription model is vastly superior to the ad plus free content model.
- The business already scales very effectively, but I expect profitability to improve once Netflix is able to generate revenues in the range of $20-$40 billion.
- Netflix’s current content collection already has mass-appeal in foreign markets. Creating comparable content requires massive film budgets, which don’t often occur in foreign markets.
- Netflix will grow along with other video-on-demand services, and it’s likely that consumers will eventually purchase a bundle of video applications over standard TV channels.
Bitcoin/Litecoin Miners Leave AMD And Nvidia In The Dust
- GPU demand is expected to decline significantly going into Q2 2014.
- The development of custom semiconductor solutions for crypto-currency mining renders mass-market GPUs like the Radeon R9 series ineffective.
- AMD will report weakening results; to what extent is the mystery as the company doesn’t break-down results.
- Nvidia looks like a more compelling alternative as the company is better diversified, and has great product execution.
- Mainstream PC demand is expected to peak; Nvidia can offset the decline in demand, and also has a better product mix when compared to AMD.