255.75 -0.19 (-0.07%)
After hours: 7:23PM EDT
|Bid||255.51 x 900|
|Ask||255.95 x 900|
|Day's Range||255.74 - 265.74|
|52 Week Range||197.46 - 323.20|
|Beta (3Y Monthly)||0.29|
|PE Ratio (TTM)||16.90|
|Earnings Date||Jun 13, 2019|
|Forward Dividend & Yield||10.60 (3.33%)|
|1y Target Est||316.79|
The United States has effectively banned its companies from doing business with Huawei, exacerbating an ongoing Sino-U.S. trade war. Huawei is allowed to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to its smartphones. - ALPHABET INC: Google on May 19 suspended the transfer of hardware, software and technical services to Huawei, except what it has made publicly available via open source licensing.
The bullish SOXL tries to deliver triple the daily returns of the PHLX Semiconductor Sector Index (XSOX) while the bearish SOXS attempts to replicate triple the daily inverse performance of that widely followed gauge of chip stocks. Broadcom Inc. (NASDAQ: AVGO), Intel Corp. (NASDAQ: INTC), Qualcomm Inc. (NASDAQ: QCOM) and Xilinx Corp. (NASDAQ: XLNX), all top 10 holdings in the index SOXL and SOXS track, are among US-based companies that previously supplied chips to Huwaei.
Zacks Value Trader Highlights: Micron, Broadcom, NVIDIA, Lam Research and Vishay Intertechnology
"It's not just network providers and tech giants who are turning their backs on Huawei," said Vanessa Katsapa, UK and Ireland country manager at PriceSpy. "Over the last four days, Huawei handsets have slumped in popularity – receiving almost half as many clicks as they did last week in the UK and 26% less on the global stage," Katsapa said. PriceSpy compiles data from customers in Finland, France, Ireland, Italy, New Zealand, Norway, Sweden and the UK.
Last week, the U.S. Commerce Department added Huawei Technologies to its Entity List, saying, “The U.S. government has determined that there is reasonable cause to believe that Huawei has been involved in activities contrary to the national security or foreign policy interests of the United States.” This in effect bars the Chinese telecom equipment maker from doing business with U.S. companies, although the trade restriction was given a 90-day reprieve a few days later.
With President Donald Trump’s latest move to put Huawei on an export blacklist, U.S. companies that supply components, services, or technical support to the Chinese telecom giant will all take a hit.
Dhiraj Bajaj, whose Lombard Odier Asia Value Bond Fund outperformed 98% of peers this year, sold the fund’s Huawei 2026 dollar notes after the Trump administration placed the company on a blacklist that curtails access to U.S. suppliers. The world’s largest provider of networking gear has become a key focus for global investors as they assess the fallout from rising tensions between China and the U.S. over everything from trade to espionage and technological dominance. While some analysts have argued that Huawei’s default risk is minimal given its large cash holdings and potential support from China’s government, Bajaj said the U.S. blacklist has raised questions about future cash flows.
Ned Davis Research points out that Qualcomm had 67% of its 2018 revenue come from China, while Micron saw 57.1% of its sales come from the second-largest economy in the world. Investors trying to get a gauge on the state of U.S.-China trade relations should look at shares of big chipmakers like Qualcomm, Micron Technology and Broadcom, according to Ned Davis Research. The firm points out that Qualcomm QCOM had 67% of its 2018 revenue come from China, while Micron MU saw 57.1% of its sales come from the second-largest economy in the world.
President Trump declared a national emergency last week -- and if you think that had something to do with global warming, terrorism, or even immigration policy, you may not have been paying close enough attention.No, this one has to do with competition in the tech sector, and specifically, competition from Huawei to lead the development of new 5G wireless technology around the world. Supported by generous state subsidies, and probably not a little state-sponsored espionage, Huawei has made great strides in developing the tech need to build a 5G infrastructure in China, in Europe, in Africa, and potentially, in the United States itself. However, as a company presumed to be under the influence of China's state security apparatus, the Trump Administration views Huawei as a clear and present danger -- if not necessarily to national security, then certainly to the peace of mind of U.S. tech firms that must compete with it.Thus, to stymie Huawei's growing influence, last week the President empowered the U.S. Secretary of Commerce to effectively "blacklist" Huawei and prevent U.S. companies from doing business with the Chinese tech giant. This order cuts off Huawei from access to microchips and other tech components essential to the manufacture of much of its 5G equipment -- everything from handsets to base stations.It also, however, prevents many U.S. companies from making sales to Huawei. And in so doing, it's hitting the business of U.S. tech giants from California -- Qualcomm (QCOM) and Broadcom (AVGO) to North Carolina -- Qorvo (QRVO) and Cree (CREE) to Massachusetts where Skyworks (SWKS) resides. Qorvo in particular looks at risk, with analysts estimating the company derives as much as 15% of its revenue from sales to Huawei (versus, for example, Broadcom, which does "de minimis" business with the Chinese company).Conversely, the Trump Administration blacklist effectively cripples Huawei's business, which depends on electronic components such as radio frequency modules, antenna tuners and other components, supplied by these American tech firms and essential to Huawei's manufacture of its 4G handsets today. Without them, the company may not live to invent the 5G tech of tomorrow. Even if the company does survive, though, Huawei's 5G tech is believed to depend on such U.S.-supplied components as "GaN power transistors" needed to build RF power amplifiers, and "silicon carbide (SiC) wafers" on which those transistors are housed, as explained in a note this week from Charter Equity Research analyst Edward Snyder.For the time being, Huawei is drawing down stockpiles of such essential components, amassed in anticipation of a ban on trade with the company. Once these supplies run out, however, Snyder warns that the company could be in something of a bind.Snyder identifies Japan's Murata Manufacturing as one potential alternative supplier of "diversity receive" (DRX) radio frequency modules -- albeit a distant second to main supplier Skyworks -- and Japan's TDK is a potential source of filters. Then again, China isn't exactly on the best of terms with Japan right now, either. (The two countries are continually feuding over ownership of certain islands in the East China Sea). Further complicating matters, TDK has a joint venture with Qualcomm, and therefore may find itself subject to the same ban restricting Qualcomm's selling to Huawei.By and large, therefore, it's Snyder's assessment that "there are no other suppliers, Chinese or otherwise, capable of filling the void left by the ban on U.S. components," and this blacklisting is likely to "devastate Huawei's phone business," at least in the 4G realm, while its development of 5G tech will "slow considerably." Conversely, in the analyst's opinion, the Trump Administration's ban on sales to Huawei is likely to accrue to the benefit of rivals like Korea's Samsung, and to Oppo, Vivo, and Xiaomi in China.At least, until the Trump Administration decides to blacklist those companies, as well.Read more: * A Look at Qualcomm (QCOM)-FTC Outcome and Its Impact on Apple (AAPL) * Will Qualcomm (QCOM) Stock Price Get Back to $60-65? * Qualcomm (QCOM) Stock Is a Buy Despite Huawei Saga, Says Analyst More recent articles from Smarter Analyst: * Micron's (MU) Tech Roadmap Highlights Flattening Cost Curve, Says Analyst; Reiterates Neutral on the Stock * Time to Cash Out on Cannabis Stock Canopy Growth (CGC) * GW Pharmaceuticals (GWPH) Stock Could Run Much Higher Over Time * Trade Tensions Bring Micron (MU) Stock Down, But Cascend Remains Bullish
US District Judge Lucy Koh made a ruling on the FTC's Qualcomm case, saying they did violate US anti-trust laws. The cyclical nature of the semiconductor business makes it very sensitive to economic factors.
How Tech Stocks Are Performing amid US-China Face-OffTrade talksThe US-China trade talks, which seemed headed in the right direction until last month, have come to a standstill. Earlier this month, US President Donald Trump accused China of going
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be...
Understanding the Impact of Trump’s Huawei Ban on US StocksHuawei banLast week, Donald Trump blacklisted Chinese telecom giant Huawei Technologies amid rising US-China trade tensions, restricting US companies’ transfer or supply of any
Broadcom Impacted by US FTC Probe and Huawei BanBroadcom stock fell 7% Broadcom (AVGO) is the world’s largest communications chip company. Broadcom is known for growing through acquisitions. The company is facing tough times amid the US-China