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  • All-Flash Arrays Offer Strong Opportunity For NetApp Despite Competition
    Thu, Jun. 26 NTAP 1 Comment

    Summary

    • At the end of 2012, NetApp was the third-largest player in the all-flash storage array market behind Violin Memory and IBM.
    • NetApp launched its all-flash array, EF550, at the end of 2013 in an attempt to compete with upcoming and existing storage manufacturers.
    • According to an IDC report, the SSA market is likely to grow at a CAGR of 34% through 2015 to become a $1.2 billion market.
  • AMD Expands Its Professional Graphics Portfolio To Increase Its Footprint In The Market
    Thu, Jun. 26 AMD 12 Comments
  • Intel Raises Its Q2'14 Outlook On Account Of Improving PC Demand
    Thu, Jun. 26 INTC 4 Comments
  • Let's Not Discount Zynga's Mobile Efforts
    Wed, Jun. 25 ZNGA 11 Comments

    Summary

    • The gaming company has managed to grow its mobile users sequentially in recent quarters, which is an encouraging sign.
    • In the first quarter of 2014, Zynga's monthly audience went up by 10% whereas its daily audience saw growth of roughly 7% over the fourth quarter of 2013.
    • Our current price estimate for Zynga stands at $3.33, implying a premium of about 10% to the market price.
  • China Unicom Leads The Chinese Wireless Market In Net Subscriber Adds
    Wed, Jun. 25 CHU Comment!

    Summary

    • China Unicom‘s consistent gains in the Chinese wireless market continued in May, as it added over 3.3 million high-speed (3G & 4G) subscribers, taking its total 3G/4G subscriber count to about 138 million.
    • China Unicom’s performance was dwarfed by market leader China Mobile, which gained over 7.6 million high-speed subscribers in the same period.
    • However, if we include the carrier’s 2G user losses (~5 million), China Unicom was ahead of the market leader in net additions by 21,000 last month.
    • Going forward, we expect China Unicom to continue its consistent monthly subscriber additions on account of its competitive plan tariffs and fast HSPA+ 3G network.
  • Pfizer's Plan B In Immuno-Oncology: Collaboration With Smaller Companies
    Wed, Jun. 25 PFE 8 Comments

    Summary

    • Competitors such as Merck and Bristol-Myers Squibb appear to have more promising immuno-oncology drugs under development, and that could impact Pfizer.
    • It makes sense for Pfizer to enter such collaborations, and perhaps even acquire smaller innovative biotech companies.
    • Acquiring companies rich in oncology drug pipelines or entering research and marketing collaboration also could help Pfizer get back on the growth track.
  • Sirius XM Turns To Used Car Market As New Car Market Matures
    Wed, Jun. 25 SIRI 20 Comments

    Summary

    • While Sirius XM's radio penetration in the new car market stands high at 70%, growth in this metric has slowed down in the last few years.
    • As the new car market matures, Sirius XM is turning its attention toward the used car market.
    • This market is turning attractive for Sirius XM and the penetration levels could rise in the future driven by the company's efforts to tap this opportunity.
  • Accenture Earnings Preview: Will Consulting Revenue Grow In Q3?
    Tue, Jun. 24 ACN Comment!

    Summary

    • Accenture is set to announce its Q3 FY2014 results on June 26.
    • In the previous quarter, the company delivered strong growth for its outsourcing division, which has outpaced the industry.
    • In this earnings announcement, apart from the growth in outsourcing division, we will closely monitor revenue from the consulting division, as it is critical for Accenture’s future growth.
    • Additionally, we will continue to observe the consulting order pipeline as it will give us a fair indication of whether global consulting demand is on the mend.
  • Micron Retains Its Growth Momentum In Q3 2014
    Tue, Jun. 24 MU 17 Comments

    Summary

    • Strong market demand and solid operational execution helped Micron Technology witness another quarter of strong growth in fiscal Q3 2014.
    • The company reported net sales of $3.98 billion, 72% higher than Q3 2013. Its net income increased from $43 million and $731 million in Q3 2013 and Q2 2014, respectively, to $806 million in Q3 2014.
    • Micron has performed strongly in the first three quarters of fiscal 2014 and is confident of retaining its growth momentum in the last quarter as well.
  • What Would Justify Netflix's Current Market Price?
    Mon, Jun. 23 NFLX 15 Comments

    Summary

    • Netflix's stock is currently trading at around $440, which is significantly ahead of our price estimate.
    • Netflix needs to grow its global streaming subscriber base to 110 million and increase average monthly revenue per subscriber to $10 over the next six years to justify its market valuation.
    • Netflix also will need to grow margins to around 40% over the course of the next five to six years.
  • What Are Lockheed Martin's Two Biggest Growth Opportunities?
    Fri, Jun. 20 LMT 5 Comments

    Summary

    • Lockheed Martin's 2013 top line fell by 4% annually to $45.4 billion due to the U.S. government’s across-the-board spending cuts, called sequestration.
    • Lockheed, which generates more than 80% of its revenues from government contracts, will likely be challenged in driving its growth.
    • We figure a ramp-up in the F-35 fighter jet’s production and international sales are the two biggest growth opportunities for Lockheed in the coming years.
    • We currently have a stock price estimate of $164 for Lockheed, approximately in-line with its current market price.
  • Micron's Earnings Preview: Improving Market Dynamics To Spur Growth
    Fri, Jun. 20 MU 6 Comments

    Summary

    • Micron has performed strongly in the first half of fiscal 2014 and is confident of retaining its growth momentum for the rest of the year.
    • Micron as well as other market players are focusing on leveraging their present technologies to deliver value-added devices to their customers.
    • Our price estimate of $22 for Micron is at a significant discount to the current market price.
  • BlackBerry's Amazon Appstore Deal Should Free Up Resources To Aid Enterprise Focus
    Fri, Jun. 20 BBRY 24 Comments

    Summary

    • The Appstore, which will be available on BB 10 devices this fall, will serve more than double the number of apps available to users of BlackBerry's newest devices.
    • The effort also will introduce several popular titles that were previously unavailable to BlackBerry users.
    • We see this as a positive for BlackBerry, since it should save the company the time and effort in courting developers to create more apps for its shrinking user base.
  • Nokia Looks To Bolster Its HERE Maps Business With Recent Buys
    Thu, Jun. 19 NOK 10 Comments

    Summary

    • The Finnish company acquired artificial intelligence firm Desti last month and announced its plans to buy predictive analytics company Medio Systems last week.
    • Nokia also launched a $100 million Connected Car Fund last month to identify and invest in companies which can help grow HERE's location and mapping ecosystem.
    • Although the division contributes only a fraction of its overall sales (~7%), the recent acquisitions suggest that Nokia is looking to add substantial value to its map offering.
  • Adobe Earnings: Cloud Adoption Continues Unhindered
    Thu, Jun. 19 ADBE Comment!

    Summary

    • The company reported over 2.3 million paid subscribers for the Creative Cloud services, a sizable increase of 464,000 over the previous quarter.
    • According to our estimates, the CC division is the biggest of Adobe’s operating segments and makes up approximately 55% of its value.
    • Adobe has guided for revenues of $975 million to $1.25 billion for the third quarter of fiscal 2014.
  • Texas Instruments Expands Its Embedded Portfolio With WiFi Solutions For IoT
    Thu, Jun. 19 TXN 2 Comments

    Summary

    • IoT, which includes all other computing devices apart from PCs, tablets and smartphones, is considered to be the next big driver for the semiconductor industry.
    • TI's SimpleLink portfolio consists of low power wireless connectivity solutions which help develop and connect anything to the IoT.
    • The fast-expanding embedded market offers significant growth opportunities for the company, and IoT is the fastest growing sub-segment.
  • Activision Relies On Its 3 Top Titles To Drive Revenues
    Thu, Jun. 19 ATVI 1 Comment

    Summary

    • Eric Hirshberg, President and CEO of Activision Publishing believes that this is one of the best combination of titles in company’s history exhibited at the expo and has high expectations from these franchises going ahead.
    • Activision reported better-than-expected results in its first fiscal quarter report last month, with strong performances from core franchises and expansion in the digital domain.
    • With plenty of games to be launched this holiday season, core gamers finally have a reason to upgrade to next generation consoles.
  • An Expanding LED Bulb Portfolio To Aid Cree's Growth
    Wed, Jun. 18 CREE 18 Comments

    Summary

    • Selling at The Home Depot for $25, the 3-Way Cree LED bulb is about half the cost of comparable LED bulbs.
    • Driven by a full lighting season, utility rebate, new products and increased marketing activities, Cree’s LED bulb sales to consumers doubled sequentially in Q2 2014.
    • Product innovation in the last few quarters has opened new applications and improved LED returns, in turn driving demand for Cree’s products.
  • Oracle Q4FY14 Preview: New License Sales To Be Weighed Down By Weak On-Premise Application Sales
    Wed, Jun. 18 ORCL Comment!

    Summary

    • Revenues from software updates and support services continued to show promise in a weak IT environment, growing 6% to $13.5 billion.
    • For the nine months in FY14, Oracle’s hardware division reported flat sales at $3.9 billion on a year-on-year basis.
    • Oracle expects Q4FY14 revenues to grow between 3% and 7% on both GAAP and non-GAAP basis.
  • Microsoft Fairly Valued At $41
    Wed, Jun. 18 MSFT 12 Comments

    Summary

    • Microsoft shares have rallied nearly 20% in the last six months to close above $41 a share on June 16.
    • As a result, the market capitalization increased to $342 billion and the current market price is in line with our stock price estimate.
    • We believe that the stock is fairly valued and the upside potential for the company is limited.
  • Flash Storage Consolidation Continues With SanDisk's Fusion-io Acquisition
    Wed, Jun. 18 SNDK, FIO 5 Comments

    Summary

    • SanDisk Corporation recently announced its decision to buy Fusion-io for approximately $1.1 billion in an all-cash deal.
    • SanDisk is looking to beef up its enterprise storage offerings, as Fusion-io specializes in solid-state storage systems.
    • If the company’s SSD market share increases to about 15% by the end of our forecast period, it could imply a 7%-8% upside to our $86 price estimate for SanDisk.
  • Is Google Glass The Next Big Money Maker?
    Tue, Jun. 17 GOOGL, GOOG 13 Comments

    Summary

    • While the project is still in its early stages, we think that it is worth examining how this offering can be a game changer and money maker for Google.
    • If wearable eye-wear were to form 30% of the wearable tech industry, which also includes smartwatches and fitness and activity tracking bands apart from smart glasses, its market size can be estimated at $9 billion.
    • We believe that Google will have a first mover advantage, and can get a sizeable chunk of this market, which will meaningfully increase its top line in the future.
  • OpenTable's Acquisition Sparks Investor Interest In Groupon
    Tue, Jun. 17 GRPN 16 Comments

    Summary

    • The increased demand for the stock can be attributed to the perception that the acquisition is an acknowledgement of value in structured location based businesses.
    • The company sends 250 million emails everyday to its subscribers and this has helped it push upfront sales of groupons.
    • We believe that Groupon will not seek a buyer if it is able to turn around its business.
  • Electronic Arts: FPS Games To Drive Market Share
    Tue, Jun. 17 EA Comment!

    Summary

    • The highlight for EA at this year's E3 convention were action role playing and first person/third person shooter (FPS) games.
    • Gamers are drifting more toward shooter games, evidenced by the fact that shooter games accounted for 14% of total game sales in 2013.
    • EA is trying to strengthen its share in the FPS segment through its Titanfall and Battlefield titles.
  • VMware And Cisco To Fight It Out In The SDN Arena
    Tue, Jun. 17 VMW, CSCO 6 Comments

    Summary

    • The battle between once-partners VMware and Cisco seems to be heating up in the software-defined networking (SDN) domain, with VMware announcing its NSX licenses to be sold via channel partners.
    • Before launching the NSX platform in October, VMware management stated that the company does not intend to harm its partnership with networking giant Cisco by launching competing SDN products.
    • We forecast VMware’s average price per license to grow to about $5,300 per license by the end of our forecast period.
  • What Tesla Stands To Gain From Sharing Its Patents
    Mon, Jun. 16 TSLA 25 Comments

    Summary

    • On June 12 2014, Tesla Motors‘ CEO, Elon Musk, wrote a blog stating that the company would not initiate lawsuits against anyone who wishes to use their technology in good faith.
    • The automaker has already been engaged in partnerships with other vehicle manufacturers like Toyota and Daimler.
    • If the move is successful, it could lead to advantageous network effects for the company.
  • Monster Is Rejuvenating
    Mon, Jun. 16 MWW Comment!

    Summary

    • We believe that aggregating social profiles and jobs will help Monster in expanding its scope significantly and better match employers with job seekers.
    • LinkedIn has changed the rules of the game, Monster needs to become more data centric, run efficient algorithms and redesign its user interface to better target the talent acquisition market.
    • The spur in economic activity will help Monster expand its recruitment business.
  • Samsung Launches Premium Tablets, But Going After Apple's Market Share Could Be A Challenge
    Mon, Jun. 16 SSNLF 5 Comments

    Summary

    • Samsung's new tablets may not contribute significantly to the bottom line given the possible high manufacturing costs and competition from Apple's iPad.
    • The high-end of the smartphone and tablet market is all about the margins.
    • Additionally, the company's marketing and promotional costs for the device could also be significant.
  • Facebook Ad Revenue May Get Boost With More Relevant Ads
    Fri, Jun. 13 FB 9 Comments

    Summary

    • Facebook has announced its plans to expand its ad targeting capabilities by utilizing user data generated outside its own platform.
    • The bigger picture is that users are going to see more relevant ads targeting their interests that Facebook’s platform alone fails to capture.
    • We currently forecast Facebook’s average revenue per 1,000 page views to increase from $0.42 in 2013 to $1.02 by the end of our forecast period.
  • Applied To Gain As Foundry And NAND Lead Capacity Expansion In The Semiconductor Market
    Fri, Jun. 13 AMAT 3 Comments

    Summary

    • On account of lower capital spending in the cyclical industries it serves, Applied Materials' revenue and net income have been under pressure over the last three years.
    • The company’s revenue base declined from $10.5 billion in fiscal year 2011 (ending in October) to $7.4 billion in fiscal year 2013.
    • Applied started its fiscal 2014 on a strong note, with a 39% and 19% annual growth in Q1 2014 and Q2 2014 revenues, respectively, backed by stronger investment from its semiconductor and display customers.
  • Seagate's Latest Acquisition Adds To Flash Storage Consolidation
    Fri, Jun. 13 STX 3 Comments

    Summary

    • At the end of May, Seagate announced the acquisition of the flash business from networking semiconductor and chip manufacturer Avago Technology for $450 million.
    • The flash business is crucial to Seagate because of an increasing mix of solid state drives, which use flash components, compared to traditional hard disk drives.
    • The acquisition continues the trend of consolidation across the storage industry, with major storage companies acquiring smaller specialist manufacturers.
  • Amazon Strengthens Its Prime Service With Song
    Fri, Jun. 13 AMZN 18 Comments

    Summary

    • Amazon recently announced that its Amazon Prime customers will now have unlimited access to more than 1 million songs.
    • Expanding Amazon Prime will help boost the retailer's sales and margins, as Prime customers tend to purchase more frequently than others.
    • We estimate that Amazon Prime customers would have accounted for roughly 14%-15% of overall purchases in 2013.