Yesterday, 12:39 PM
Wed, Aug. 26, 4:21 PM
- The Nasdaq has closed its latest ultra-volatile day up 4.2%. Chip stocks, hit hard in recent weeks amid China/inventory concerns, were among the standouts (SOXX +5%) during the rally: Big gainers included Nvidia (NVDA +7.5%), Skyworks (SWKS +6.9%), Qorvo (QRVO +5.9%), Xilinx (XLNX +6.3%), Analog Devices (ADI +7.1%), Linear (LLTC +6.1%), SanDisk (SNDK +7.4%), ON Semi (ON +6.2%), and Cavium (CAVM +5.6%).
- Cybersecurity plays and various other enterprise tech names also did well. Standouts included HP (HPQ +5.5%), Palo Alto Networks (PANW +6%), Rackspace (RAX +9.8%), Red Hat (RHT +5.9%), KEYW (KEYW +8.1%), Brocade (BRCD +5.6%), ShoreTel (SHOR +5.7%), Violin Memory (VMEM +14.7%), and Rapid7 (RPD +7.2%).
- In addition to HP, tech large-caps turning in big gains included Apple (AAPL +5.7%) Microsoft (MSFT +5.5%), Google (GOOG +7.7%), and Intel (INTC +5.5%). Google benefited from a Goldman upgrade.
- KEYW announced a CEO change yesterday afternoon. HP and Brocade are adding to last week's post-earnings gains. Skyworks/Qorvo peer Avago has posted an FQ3 beat after the close.
Tue, Aug. 25, 9:14 AM
- "While we note that our fundamental stance on Apple's challenges are unchanged, we believe shares have over-corrected," writes Wells Fargo's Maynard Um, upgrading to Outperform. His target range is $125-$135.
- Um, who downgraded Apple (NASDAQ:AAPL) back in early 2014, adds Tim Cook's Monday e-mail to Jim Cramer regarding Chinese iPhone sales provides better calendar Q3 visibility. "We also note AAPL’s 3rd party manufacturing & component commitments ... suggest upside potential to its $49B-51B guidance. While our concern on tough compares for the Dec quarter are unchanged and our [estimates] remain below the Street, we believe the stock had been reflecting this challenge ... We believe the risk/reward at 8x our [free cash flow estimate] is tilted favorably with China strength appearing to have continued recently and the quarter having some visibility..."
- With the help of higher equity markets - Nasdaq futures are up 3.7% - Apple has risen to $109.01 premarket. Shares fell as low as $92.00 yesterday morning before closing at $103.12.
- Update (4:15PM ET): Apple gave back most of its gains as markets sold off this afternoon. Shares closed up 0.6%.
Mon, Aug. 24, 9:01 AM
- Amid a rout in China Monday, Apple (NASDAQ:AAPL) is down 5.8% to slip below $100/share in premarket trading, quoting at its lowest point in 10 months.
- Last week, the company lost 8.8% as well, with some observers pointing to Chinese market uncertainty.
- The company's confirmed it's replacing a glitchy camera on a "small percentage" of iPhone 6 Plus devices that results in blurry photos.
- Shares in Apple have slid 17% since it was added to the Dow earlier this year.
- Update: In an e-mail to Jim Cramer, Tim Cook states Apple "continued to experience strong growth for our business in China through July and August," and that iPhone activation growth "has actually accelerated over the past few weeks." Apple's Greater China revenue rose 112% Y/Y in calendar Q2, and accounted for 27% of its revenue.
- Update 2 (11:51AM ET): Apple has rebounded as equity markets have pared their big early-morning losses: Shares are now up 0.8%.
- Update 3: Apple joined the Nasdaq in reversing course again this afternoon. Shares closed down 2.5%. 161.4M were traded, over 3x a 3-month daily average of 50.4M.
Mon, Aug. 24, 8:03 AM
- Tech stocks in the U.S. are sharply lower in early action after the sector fell just as hard as broad market averages in China and Japan. Tech heavyweights aren't getting spared amid the carnage.
- Google (NASDAQ:GOOG) -4.1% premarket to $587.31.
- Apple (NASDAQ:AAPL) -5.1% to $100.38.
- Microsoft (NASDAQ:MSFT) -3.9% to $41.41.
- Facebook (NASDAQ:FB) -3.4% to $83.05.
- Yahoo (NASDAQ:YHOO) -6.6% to $30.75 and Alibaba (NYSE:BABA) is down 8.7% to $62.26 as concerns over growth in China mount.
- The Nasdaq 100 futures contract is off 4.8%.
- Related ETFs: XLK, VGT, HACK, SOXL, FDN, GGT, TECL, USD, SMH, IYW, TDIV, IYZ, SOXX, ROM, XSD, VOX, SOXS, FTEC, TECS, RYT, PBS, PSI, IGV, QTEC, IGM, FXL, SSG, PSCT, IGN, MTK, REW, XTL, PXQ, FCOM, XSW, PSJ, PTF, LTL, TLL
Fri, Aug. 21, 4:14 PM
- The major averages all plunged another 3%-plus to close the week.
- The Dow (NYSEARCA:DIA) lost 5.8% for the week - it's worst weekly stretch since September 2011 when the European debt crisis was at its peak and the U.S. had just been downgraded. The S&P 500 (NYSEARCA:SPY) fell 5.5% - also its worst week since Sept. 2011. The Nasdaq (NASDAQ:QQQ) fell 6.7%, its worst week since Aug. 2011.
- The Dow is lower by 7.6% YTD, the S&P 500 3.75%, and the Nasdaq 0.55%.
- The 10-year Treasury yield slipped three basis points to 2.04%, its lowest print since before the summer, and oil briefly fell below $40 per barrel (it's back to $40.34 at pixel time).
- Apple's (AAPL -6.1%) decline today put that stock 20% below its level of just one month ago, and the shares are in the red for the year to the tune of 4.2%. On a year-over-year basis, they're higher by 7.95%.
Tue, Aug. 11, 2:40 PM
- After rallying strongly yesterday, Apple (NASDAQ:AAPL) has more than given back its gains today amid a 1.7% drop for the Nasdaq. 70.7M shares have been traded, well above a 3-month daily average of 46.9M.
- Jefferies' Sundeep Bajikar has cut his target by $5 to $130 (still over $16 above current levels), while reiterating a Hold. "Our checks on the ground in Hong Kong, Shanghai, Seoul and Tokyo suggest iPhone is enjoying robust consumer demand. However, given stock market worries (since late-June) in China, we would not be surprised if Apple was taking a more cautious view of end demand, and cutting iPhone-related orders in the supply chain. Our checks also continue to suggest that iPhone is facing strong competition in China, primarily from Huawei, Xiaomi, and Samsung." Apple's Greater China revenue was up 112% Y/Y in FQ3 (calendar Q2), and made up 27% of total revenue.
- The note comes shortly after the PBOC devalued the yuan, leading it to drop 2% against the dollar. Beijing's move could spell both slightly higher local prices (on a yuan basis) for Apple products, and slightly lower manufacturing costs (on a dollar basis).
- Separately, Bluefin Research reports checks point to an approximate 10-day delay for the start of iPhone 6S production. "While we cannot decipher the exact reason for the delay, this has resulted in a reduction of projected iPhone builds for 2H:15. Previous build plans were centered around 130M total iPhone builds (not shipments) and these have recently been reduced by just over 6% to approximately 122M." KGI's Ming-Chi Kuo has also reported seeing a brief delay.
Mon, Aug. 10, 3:01 PM
- The Nasdaq is up 1.2%, and Apple (NASDAQ:AAPL) is doing more than its fair share. 44.5M shares have been traded thus far vs. a 3-month daily average of 46.9M.
- Bernstein, Oppenheimer, and Nomura have issued bullish notes today. Berntein's Toni Sacconaghi argues iPhone sales can still rise in 2016 in spite of the tough comps produced by a strong iPhone 6/6+ upgrade cycle: He argues further high-end smartphone share gains are possible, notes first-time iPhone buyers still account for ~35% of sales, and observes many U.S. buyers are no longer beholden to 2-year contracts. Chinese income growth and an iPhone 6/6+ price cut (following the 6S launch) are also seen as catalysts.
- Oppenheimer's Andrew Uerkwitz also cites Chinese growth and high-end share gains as potential catalysts - he thinks the Chinese iPhone base will surpass the U.S. base in 2015 - and argues Apple's service revenue growth is underappreciated. He adds chip suppliers with strong Apple exposure are outperforming peers amid an industry downturn.
- Nomura's Jeffrey Kvaal: "Fears of broad order cancellations in Apple’s supply chain driven by soft China demand appear exaggerated to us. Our Taiwan Technology team, led by Anne Lee, notes that some suppliers, such as Catcher, have not seen cancellations over the past month. Bottlenecks may defer demand slightly for some vendors, but stable orders and an on-track 6S launch suggest fears will be short lived ... We believe the 6S will enter a subscriber base no more penetrated with the 6 than a typical launch – likely the low end of our 35-40% range."
- Apple is now up 7% from a Wednesday low of $112.10, but still down 8% from where it traded going into its July 21 FQ3 report. Cirrus Logic (CRUS +4%), which received 62% of its calendar Q2 revenue from Apple, is also outperforming.
Tue, Aug. 4, 11:28 AM
- A day after Business Insider reported Apple (NASDAQ:AAPL) is in talks with U.S. and European carriers to offer mobile phone services on an MVNO basis (i.e. using the infrastructure of existing carriers), the company says it hasn't discussed launching an MVNO service, and isn't planning to offer one.
- Though the Nasdaq is down just 0.2%, Apple is selling off for the second day in a row, and once more in the absence of major negative news. 67.1M shares have already been traded, topping a 3-month daily average of 45.3M.
- Apple is now down 12% since posting FQ3 results on July 21. Shares go for 11.8x an FY16 (ends Sep. '16) EPS consensus of $9.77.
Wed, Jul. 22, 12:15 PM
- Cowen has downgraded Apple (NASDAQ:AAPL) to Market Perform after the company beat FQ3 estimates, offered light FQ4 guidance, and reported slightly below-consensus iPhone sales. Others on the Street are reiterating their existing ratings (largely bullish).
- Upbeat on Monday, Cowen's Tim Arcuri now thinks "evidence of a widespread demand reset from China is mounting." He cites not only FQ3 iPhone sales, but also Chinese auto sales figures and results from multiple chipmakers. In addition, Arcuri states field work suggests new iPhone builds are down relative to the past cycle for the first time. "[W]hile we are very bullish about AAPL’s ability to tap into a much broader and deeper demand opportunity for a price-reduced 6/6+ than prior 'old' models, this is a different narrative."
- UBS' Steve Milunovich (Buy): "Our call that the phone ASP would be $660 was correct but we overestimated units, especially with channel inventory declining ... Despite seasonally low iPhone units, we believe Apple is building long-term value and maintain our $150 price target. Also, it is unclear if Sep guidance includes 6s sales to China, which were delayed into October last year.”
- Canaccord's Mike Walkley (Buy): "[W]e believe the current iPhone 6 and upcoming iPhone 6s should continue to post strong sales and high-end smartphone market share gains ... with only 27% of the iPhone installed base having upgraded to the iPhone 6/6 Plus devices by [FQ3], we anticipate continued strong replacement sales through 2015."
- "As Apple has become the 'gold standard' of technology, it is held to a higher standard," argues FBR's Daniel Ives (Outperform). With Greater China revenue up 112% Y/Y in FQ3, he considers China concerns overblown, but wants to see more transparency regarding Watch sales.
- Prior Apple coverage, CC transcript
Wed, Jul. 22, 9:16 AM
Tue, Jul. 21, 5:40 PM
Tue, Jul. 21, 4:59 PM
- Apple (NASDAQ:AAPL) had an FQ3 gross margin of 39.7%, +30 bps Y/Y and above a 38.5%-39.5% guidance range. FQ4 GM guidance is also at 38.5%-39.5%.
- Product line performance: iPhone revenue (63% of total revenue) +59% Y/Y to $31.4B; units +35%. iPad revenue -23% to $4.5B; units -18%. Mac revenue +9% to $6B; units +9%. Services (iTunes, App Store, AppleCare, Apple Pay, etc.) +12% to $5B. Other products (Apple Watch, iPod, Beats, accessories, etc.) +49% to $2.6B.
- Regional performance: Americas revenue +15% Y/Y to $20.2B. Europe +19% to $10.3B. Greater China +112% to $13.2B. Japan +9% to $2.9B. Rest of Asia-Pac +26% to $3B. International markets made up 64% of revenue vs. 69% in FQ2.
- ASPs: iPhone ASP was $660 vs. $659 in FQ2 and $687 in FQ1. iPad ASP was $415 vs. $430 in FQ2 and $419 in FQ1. Mac ASP was $1,257 vs. $1,231 in FQ2 and $1,258 in FQ1.
- Financials: GAAP SG&A spend rose 25% Y/Y to $3.56B; R&D spend rose 27% to $2.03B. $10B was spent on buybacks, up from FQ2's $7B. Apple ended FQ3 with nearly $203B in cash/investments (much of it offshore), and over $47B in debt.
- Apple has declared its regular quarterly dividend of $0.52/share. The next dividend is payable on Aug. 13 to shareholders on record as of Aug. 10.
- Shares have fallen to $121.60 in AH trading. Earnings call starts at 5PM ET (webcast).
- FQ3 results/FQ4 guidance, PR
Tue, Jul. 21, 4:33 PM| 253 Comments
Mon, Jul. 20, 2:16 PM
- Piper, Cantor, and Cowen have each released upbeat notes ahead of Tuesday afternoon's FQ3 report. Apple (NASDAQ:AAPL) has risen to its highest levels since May 26, and is less than $2.50 away from an April 28 high of $134.54. The Nasdaq is up 0.3%.
- Piper's Gene Munster, bullish as ever, forecasts FQ3 EPS of $1.82, revenue of $50B, and iPhone sales of 49M-50M (moderately above consensus). "To put 49 million in perspective, it would imply 39% y/y unit growth vs the Mar-15 quarter of 38% excluding 1 million in channel fill ... This acceleration reflects iPhone gaining share at the high-end of the market, a trend that we expect to continue throughout 2015." He expects 17% iPhone unit growth for the whole of 2015, and flat growth in 2016.
- Cantor's Brian White: "During our Taiwan trip in early June, many of our contacts highlighted weak trend across the smartphone and notebook markets; however, we walked away pleased the tone for iPhones and Macs relative to our expectations ... we are raising our iPhone unit estimate to 48.5 million from 46.25 million ... but lowering our iPad projection to 9.5 million from 10.9 million units ... We are maintaining our Mac shipment forecast at 4.93 million units but increasing our Mac forecast for the September quarter."
- Cowen's Tim Arcuri: "We model iPhone units 50MM (incl. 28MM 6 and 13MM 6+), above Street which seems 48-49MM. We raised ests in June ... but still see upward bias given 1) our latest field work suggesting ongoing cuts to supply chain for iPhone’s high-end competition (e.g. Samsung Galaxy S6); 2) recent Cowen survey data showing increased iPhone penetration growth and meaningful future loyalty at key U.S. operators ... and 3) China sales which remain strong despite demand and stock market uncertainties."
- Wells Fargo's Maynard Um has also hiked his estimates, albeit while maintaining a Market Perform rating. "We think [iPhone] unit upside could be driven by the 25 carriers added in the quarter ... as well as purposely building indirect channel inventory (ended last quarter at the low end of its 5-7 week target) ... We believe gross margin upside in this S-cycle may be offset by increased bill of materials and potential pricing actions at the lower end."
- Separately, research firm Wristly states a survey of Apple Watch owners found 66% were "very satisfied/delighted" with the device, and that 31% were "somewhat satisfied" with it.
- A week ago: SocGen upgrades Apple, hikes FQ3 iPhone estimates
Thu, Jul. 9, 4:35 PM
- After trading higher this morning, Apple (NASDAQ:AAPL) sold off on strong volume in afternoon trading. 77.7M shares changed hands today, topping a 3-month daily average of 45.1M. The Nasdaq rose 0.3%.
- Chinese macro fears fueled by the country's stock market crash are receiving plenty of ink. FBR's Daniel Ives: “China is poised to be Apple's high-octane fuel for the next few years, especially for iPhones ... Given a lot of the dark clouds we are seeing in China, that has spooked investors.” Chinese stocks rose overnight after fresh attempts by regulators to halt the plunge
- In an intraday note, Goldman cited Chinese worries as one of four potential factors weighing on shares, along with reports of soft Watch demand, a buyback blackout period, and sales by hedge funds and mutual funds.
- UBS, meanwhile, issued a note (.pdf) stating checks point to strong FQ3 (calendar Q2) Chinese iPhone sales. The firm admitted "a slowing Chinese economy is a risk," but downplayed fears a market crash will have a big macro impact, given equities account for only 20% of household wealth (12%-13% if one counts property). Thanks partly to pent-up demand for larger iPhones, Apple's Greater China revenue rose 71% Y/Y in FQ2 to $16.8B (29% of total revenue).
- FQ3 results arrive on July 21. Shares currently go for 12.3x an FY16 (ends Sep. '16) EPS consensus of $9.73.
- Yesterday: Apple reportedly wants suppliers to produce 85M-90M iPhone 6S units.
AAPL vs. ETF Alternatives
Apple Inc designs, manufactures, & markets mobile communication & media devices, personal computers, & portable digital music players, & sells a variety of related software, services, accessories, networking solutions, & third-party digital content.
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