U.S. equities are volatile and bouncing around the unchanged line on Friday as President Trump talks up the chances of a possible trade deal with China. Something Beijing has in turn talked down.
Also weighing on sentiment was disappointment with the quarterly results out of Apple (NASDAQ:AAPL) amid a realization that higher average selling prices on new models (a trend started with the iPhone X last year) isn’t quite the huge positive the bulls were thinking. That’s because it’s a desperate move to offset lower unit volumes. Thus, Apple will no longer release unit sales data for the iPhone.
This clear attempt to bury the bad news has turned investors away from AAPL as well as a number of its supplier stocks. Here’s a look at the key tech stocks to sell amid the carnage.
Apple (NASDAQ:AAPL) shares are down more than 7% on Friday, cutting below their October low and losing the $1 trillion market capitalization threshold. The catalyst was the admittance that iPhone unit volumes were flat last quarter, a realization that overshadowed the reporting of better-than-expected earnings of $2.91 per share (13 cents ahead of estimates).
AAPL will next report results on Jan. 31 after the close. Analysts at Needham defended the move, saying investors are increasingly valuing the company for its “ecosystem” and would prefer metrics on its installed base of unique users and revenue per user.
Qualcomm (NASDAQ:QCOM) shares are threatening to fall below their 200-day moving average and the post-earnings gap rally from late July, adding them to the list of stocks to sell as AAPL continues to disappoint. A supplier of cellular modems, QCOM is vulnerable to a downturn in iPhone sales. Analysts at Bank of America Merrill Lynch recently downgraded QCOM stock to “Neutral.”
QCOM will next report results on Nov. 7 after the close. Analysts are looking for earnings of 89 cents per share on revenues of $5.5 billion. When the company last reported on July 25, earnings of $1.01 per share beat estimates by 30 cents on a 5.7% rise in revenues.
Investors are adding Broadcom (NASDAQ:AVGO) shares to their “stocks to sell” pile after AVGO bonked on resistance from its 50-day and 200-day moving averages. This has set up a decline back to the lows set in July and August. Already down roughly 17% from the high set in June, a fall back to the summertime lows would be worth another drop of 12% from here. AVGO’s acquisition of CA Technologies (NASDAQ:CA) has been the focus of a possible national security review.
AVGO will next report results on Dec. 6 after the close. Analysts are looking for earnings of $4.9 per share on revenues of $5.4 billion. When the company last reported on Sept. 6, earnings of $4.98 per share beat estimates by 16 cents on a 13.4% rise in revenues.
Texas Instruments (TXN)
Shares of Texas Instruments (NASDAQ:TXN) are being turned away from their 20-day moving average and are threatening to fall back to the lows set in late October. Already, TXN shareholders have suffered a loss of more than 17% from the highs set over the summer and are threatening to return to lows not seen since late 2017.
TXN will next report results on Jan. 22 after the close. Analysts are looking for earnings of $1.24 of share on revenues of $3.8 billion. Investors and analysts were disappointed by the issuance of weak forward guidance on worries about the cyclical slowdown in the entire chipmaking space.
STMicroelectronics (NYSE:STM) remains in the doghouse, as STM shares are down nearly 40% from the highs seen in June, meaning STM is now testing the lows last seen in June 2017. While valuations have become more attractive, leading UBS analysts to issue an upgrade on Oct. 29, lingering concerns about the health of the semiconductor space amid a slowdown in iPhone volumes remain. The company is a supplier of the infrared camera that powers Apple’s FaceID system.
STM will next report results on Jan. 23 before the bell. Analysts are looking for earnings of 44 cents per share on revenues of $2.7 billion. When the company last reported on Oct. 24, earnings of 41 cents per share beat estimates by 5 cents on a 18.1% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
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