Apple's iPhone Is Good, No Bad?; Google's New Devices; Adobe's Earnings Beat - Eye On Tech

| About: Apple Inc. (AAPL)
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Reports for Apple's iPhone 7 continue to vary. Maybe we should just wait for the company's earnings report.

Google plans to show off a number of new hardware devices on October 4th. Comcast is planning on providing wireless service.

Adobe beat on earnings per share and revenue expectations, sending shares to would-be all-time highs in after-hours trading.

Too Much Flip-Flop for Apple

If you're skeptical and don't believe in Apple (NASDAQ:AAPL), that's fine. And if you're a long-term Apple bull, that's just fine too. Because over the past few weeks, we've gotten enough bits of news to form both bullish and bearish takes on the company.

Last week, shares of the $600+ billion company climbed more than 10% as optimism welled over Apple's new iPhone. These feelings of joy were fueled by comments from wireless providers that demand was seemingly off the charts and the company's confirmation that many models are out of stock and will remain that way for some time.

Others look at comments from the analysts, which say, hey, maybe things aren't quite as rosy as it seems. JPMorgan is cautious on demand, as is Piper Jaffray's Gene Munster. Of the latter, his team says their data "contradicts what were generally positive initial demand indicators from T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S)."

So who's right?

We don't know and assuming that you've picked a position, it doesn't really matter now. Most investors either believe the device is selling like hotcakes or they think the initial wave will die out relatively quickly.

The reviews of the device are strong and the guts of the iPhone are impressive. With all due respect, if Gene Munster doesn't know how the iPhone is faring, few of us will know either. Let see what the company reports in October and let's listen to the conference call to get a sense of what to expect going into the holidays.

If demand disappoints for Q1 (in January), I would suspect that the stock will really struggle. Why? Simply put, if Apple can't exceed expectations during its busiest season, how can it possibly fare okay during its slowest? So far though, it seems like the holiday season won't be an issue.

Google's New Devices

There's been a lot of new product announcements recently, most notably the products from Apple and from GoPro (NASDAQ:GPRO). But Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) doesn't want to miss out on the action either.

The company has set an October 4th date for its hardware launches, with expectations to see new phones, a new speaker/assistant (similar to Amazon's (NASDAQ:AMZN) Echo), and possibly a new Chromebook and virtual reality platform.

There's quite a bit of debate about Google. Not necessarily on software or search, but more so on the hardware front. Given that Samsung (OTC:SSNLF) and Apple have entrenched themselves into such dominating positions in the smartphone market, many question why Google is still involved.

In fact, many wonder at all why Google bothers with hardware and doesn't focus simply on its collection of powerful businesses and brands, (think search, Gmail, YouTube, etc.).

Perhaps Google's other successes are exactly why it forges forward with new hardware endeavors. They may not be the most popular products on the market, but it keeps Google's name out there. It keeps its software and OS on devices. It gives Google a chance to strike out, but also to hit a home run.

Google's version of Echo could really be something great, kickstarting Google Home. That has potential, especially between Google's Nest acquisition and its other applications like Maps, Gmail and Calendar. Along with search, it can all be tied together. And that offers potential.

While it remains to be seen if it will work, the company is at least taking its shot with finding future growth - even if that growth will never top its larger businesses.

Comcast's New Wireless Service

Could Comcast (NASDAQ:CMCSA) be your next wireless carrier? It could, but it's not going to start building cell towers and competing directly with companies like Verizon (NYSE:VZ) and AT&T (NYSE:T). In fact, Comcast and Verizon will even be working together.

While details are still sparse, such as the price or which devices will work it on it, we do know that Comcast is looking to launch the service by mid-year 2017. Comcast is working on an MVNO - or a mobile virtual network operator service.

In a nutshell, an MVNO provides users mobile service via Wi-Fi networks. When that user's device is not connected to a Wi-Fi network, Comcast pays wireless carriers' to use their cell towers for the service. Comcast then charges the user for data. In this case, it appears Comcast would use Verizon.

Verizon could be set up for a big payday if the service picks up pace. It's also an interesting development given AT&T's semi-recent acquisition of DirecTV.

So far, that move appears to be paying more dividends than Verizon's acquisition of AOL (NYSE:AOL) and Yahoo! (YHOO). However, a partnership with Comcast could give Verizon a financial boost, while also technically helping Comcast better compete with AT&T/DirecTV.

We'll have to see how this all plays out, but given Verizon's potential payout, the stock's 10% pullback and the 4.5% dividend yield, perhaps it is the best play from all of this.

Shares of Adobe Hit New Highs

The stock hit new 52-week and all-time highs, although its 4% after-hours gain will have to hold up until Wednesday's session to officially count.

Adobe (NASDAQ:ADBE) beat on earnings per share estimates and marginally topped revenue expectations. Initially, the stock traded lower in post-market action, but it has since shot up toward $104.75 a share. Its previous high-mark stands at $104.16.

Since switching to a subscription-based model, shares of Adobe have been on fire. And in fact, the stock has been a monster, up almost 300% over the past five years alone.

Some investors may just assume Adobe has been rolling along for years, like Google or Amazon. But that's not the case. In the five years prior to that period (so Sept. 2006 to Sept. 2011), the stock was actually down 31%.

So the turnaround is very much noteworthy. Its products are loved by many and its 20% year-over-year sales growth shows that momentum remains strong. Despite the company's strong performance and the stock's resilience, the valuation has to be becoming a concern. Its price-to-sales ratio remains elevated at 9.5x, while its P/E ratio of 57 is sure to keep some investors away.

However, despite the numbers, Adobe keeps delivering. It expects EPS of 83 cents to 89 cents on $1.55 billion to $1.6 billion in sales for next quarter, both ahead of consensus estimates of 78 cents per share on $1.57 billion. Its full-year revenue guidance is also ahead of analysts' average estimates.

Until that stops, the stock will likely keep moving higher.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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