|Bid||278.45 x 900|
|Ask||279.88 x 900|
|Day's Range||266.76 - 283.00|
|52 Week Range||197.46 - 323.20|
|Beta (3Y Monthly)||0.64|
|PE Ratio (TTM)||37.11|
|Earnings Date||Sep 4, 2019 - Sep 9, 2019|
|Forward Dividend & Yield||10.60 (4.21%)|
|1y Target Est||316.61|
Jun.18 -- Neil Dwane, Allianz Global Investors global strategist, says he's still buying the rally in equities. He appears on "Bloomberg Daybreak: Americas."
What makes a China stock? All you have to do is look at what rallied big after President Donald Trump tweeted that he had a very good conversation with Chinese President Xi Jinping -- in itself a shocker these days -- and will have an extended conversation with the man who rules the Peoples Republic, when they get together next week at the G-20 meeting. Ten-year interest rates are diving, housing's weakening, retail's sluggish and the transports are flagging.
Recently, there has been significant turmoil surrounding the electronics component sector, specifically in wireless equipment and semiconductors. This was mostly due to the US blacklist of Huawei in May, coupled with increased US-China trade war tensions.
At one point on Tuesday, the Nasdaq was up about 2% on the day. Although the index eased off those gains going into afternoon trading, investors didn't completely take their foot off the gas.Source: Shutterstock Thanks to positive comments from President Donald Trump, the Nasdaq jumped 1.39% on the day, outperforming both the Dow Jones and S&P 500, which climbed 1.35% and 0.97%, respectively.So what did Trump say to cause such a rally? Well, the very opposite of what he said to derail the stock market rally last month. As trade-war worries flood Wall Street and wreak havoc on conference calls, the President tweeted that he, "Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting."InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis sent tech stocks, and in particular, chip stocks soaring on the day. In tech, the trade war has impacted everything from customer demand to declining margins thanks to increased tariffs. Some of the industry has been able to shake off the woes -- like Cisco Systems (NASDAQ:CSCO) and Microsoft (NASDAQ:MSFT) -- but not everyone has been so lucky. Biggest Winners in the Nasdaq TodayChipmakers stole the show Tuesday, as Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) -- here's how to trade AVGO stock -- all scorched higher on the day. * 5 Stocks to Buy for $20 or Less AMD raced higher by 4.3%, while Nvidia jumped 5.4% and Broadcom rallied 4.5%. The mere idea that the trade war talks could improve was enough to send these stocks skyward. It has got many on Wall Street wondering just how compressed this group is thanks to the friction between China and the White House. If the trade-war rhetoric remains positive ahead of the G-20 summit, it's possible for this group to continue higher.That said, investors also have to be aware of the Federal Reserve meeting on Wednesday. There's only a 24% chance of a rate cut announcement at this meeting, so most investors aren't expecting one yet. But they will be looking for a more dovish stance from the Fed, particularly following the European Central Bank's accommodative stance this week, and given the fact that the futures market is pricing in a 98% chance for at least one rate cut by December.So that's something to be aware of.NAND and DRAM players were also in the spotlight. Micron (NASDAQ:MU) jumped 5.7%, while equipment makers like Lam Research (NASDAQ:LRCX) and Applied Material (NASDAQ:AMAT) rallied 4.6% and 4.5%, respectively. Click to Enlarge Adobe Systems (NASDAQ:ADBE) is on investors' radar too, as it gears up to report second-quarter earnings after the close. Consensus expectations call for earnings of $1.78 per share on revenue of $2.7 billion. Those estimates suggest year-over-year growth of 18.5% and 23.2%, respectively.Finally, Microsoft is shaking off any worries about the trade war as shares hit new all-time highs. MSFT closed at $135.16, up 1.74%, while rallying almost 10% so far this month. Bottom Line on the Nasdaq TodayThe trade war is what dragged the Nasdaq from its all-time highs in early May. But a resolution is likely what will vault the index back up to them. The markets came into June in an oversold condition, but the bounce was most telling. After the Nasdaq, S&P 500 and Dow all rallied to start the month, the bears weren't able to push it back down.That action is important, suggesting that a larger rally was brewing after some consolidation. That extension could be taking place now, but we still have the Fed to get through.Fed Chair Powell has not been the smoothest talker when it comes to FOMC events, so it will be interesting to see how the market reacts tomorrow. A dovish Fed could ignite stocks even higher, while a hawkish Fed could undo many of today's nice gains. The same rally/puke potential exists with the President's Twitter account.All said, it was a very strong day for the Nasdaq today, although Facebook (NASDAQ:FB) was a noteworthy laggard.The social media giant finally announced its Libra cryptocurrency. While this was anything but a secret, it was interesting to see FB give up all of its Tuesday gains. Ending slightly lower on the day, down 29 basis points, is not what many investors had in mind given the strength in tech.The bottom line: Watch the Fed on Wednesday.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AMD, NVDA and AVGO. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Nasdaq Today: Chip Stocks Surge on Improving Trade-War Rhetoric appeared first on InvestorPlace.
The United States banned all its companies from doing business with Huawei effective May 15 but later gave a 90-day waiver to give the US and Chinese firms time to adjust their supply chains. This ban goes two ways. US firms cannot ship technology to Huawei, nor can they use Huawei’s technology.
Broadcom (AVGO) is among the world’s top ten chipmakers by revenue. It has one of the most diversified communication chip portfolios. It designs semiconductors for telecommunications gear, mobile, TV, and cable boxes, enterprise, and data center.
Semiconductor stocks could fall further toward the end of June if the United States decides to impose tariffs on the additional $300 billion of Chinese imports and China retaliates with export restrictions on rare earth minerals. The semi stocks could also be impacted by a weak second-quarter earnings season that reflects the financial impact of the trade war.
Chip stocks have been on a volatile ride over the past year as investors have struggled to grapple with where exactly the semiconductor industry goes next.The iShares PHLX Semiconductor ETF (NASDAQ:SOXX) rallied to all-time highs in mid-2018 as the industry broadly benefited from record cloud data-center spend, steady PC and smartphone growth, strong global auto growth and burgeoning demand in the AI and IoT end-markets. But, in late 2018, the SOXX ETF tumbled more than 25% on concerns that a slowing global economy was going killing all that robust demand, at the same time that supply was building across the whole sector.Chip stocks shrugged off those fears in early 2019. As the global economy stabilized and recession fears disappeared, so did concerns regarding a slowdown in the semiconductor space. The SOXX ETF rallied back to all-time highs by late April 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThen, another sell-off began. Trade tensions re-escalated. Recession fears came back. So did concerns surrounding global semi demand. Chip stocks sold off. They remain in selloff mode today. As of this writing, the SOXX ETF trades 15% off its April 2019 highs.What's next in this wild trip for chip stocks? Tough to say. But, it is easy to say that these stocks are broadly staring at big demand headwinds in 2019.The PC and smartphone markets globally are flattening out, because everyone who wants either a computer or a smartphone, already has one. Global auto sales are dropping, especially in China, as consumers continue to express caution with the global economy slowing. Big tech companies are likewise acting more cautiously, and record data-center spend in 2018 is coming down in 2019. * 7 Top-Rated Biotech Stocks to Invest In Today Net net, the backdrop isn't great for chip stocks right now. As such, investors should be cautious when considering an investment in any of the following chip stocks. Micron (MU)Source: Shutterstock One of the riskiest chip stocks here and now is memory chip giant Micron (NASDAQ:MU), for the simple reason that the memory market is notoriously and violently cyclical.In the memory market, it's all about supply-demand fundamentals. When demand is high and supply is low, memory chip prices are high, and memory chip-makers make boat loads of profits. But, when demand is low and supply is high, memory chip prices are low, and memory chip-makers make no profits. Unfortunately, supply and demand in the memory market cycle often and dramatically. Eras of high demand and low supply are usually followed by eras of low demand and high supply. Just look at a chart of Micron's profits or stock price over the past two decades.Right now, we are in the process of the memory market going form high demand and low supply, and to rising supply and falling demand. The rising supply part seems to be moderating. But, the falling demand part isn't moderating, mostly because rising geopolitical tensions continue to dilute memory chip demand. So long as that remains true, Micron's profits will continue to drop, and so will MU stock.As such, until the global memory market demand picture turns positive, MU stock will have a tough time staging a big turnaround. Broadcom (AVGO)Source: Shutterstock One of the biggest semiconductor companies in the world, Broadcom (NASDAQ:AVGO), is not exempt from the macro factors diluting demand across the global semi industry.Broadcom just reported solid second-quarter numbers, which broadly topped expectations and included double-digit revenue growth alongside healthy margin expansion. But, management also delivered a significantly sub-par, full-year guide thanks to what they are calling a "broad-based slowdown in the demand environment". The culprit? Rising geopolitical uncertainties that are causing customers to reduce inventory levels.So long as this slowdown persists, AVGO stock will have a tough time rallying. The stock isn't particularly cheap here relative to its historical standard, at 12-times forward earnings today versus a five-year average forward multiple of 13. As such, you have a stock with not-so-good, go-forward fundamentals, trading at a historically average valuation. * The 7 Best Tech Stocks to Buy for the Second Half of 2019 That's not a great combo. Until this stock gets cheaper -- or until the fundamentals improve -- AVGO stock will likely fail to rally. Qualcomm (QCOM)Source: Shutterstock The story at Qualcomm (NASDAQ:QCOM) is riddled with question marks. All those question marks against the backdrop of a depressed semi market backdrop could keep QCOM stock stuck in neutral for the foreseeable future.Qualcomm scored a huge win recently, when Apple settled with the chip giant, paid the company a huge lump sum royalty payment and came back on as a Qualcomm customer. Shortly after that, though, it was ruled that Qualcomm's patent royalty practices violated U.S. antitrust law. That's a big deal, since most of Qualcomm's profits come from the high-margin licensing business. The ruling broadly implies that the licensing business is going to have to change, and in a way that will probably dilute profits.Consequently, investors are stuck asking themselves exactly what Qualcomm's licensing business will look like in a few years. The truth is, no one knows. Investors don't like uncertainty. They especially don't like uncertainty when it comes against the backdrop of a depressed macro semi market struggling with falling demand and geopolitical tensions.To be sure, none of these issues will last for QCOM stock. The stock does look like a good long-term buy here, since long-term fundamentals are healthy. But, near-term uncertainty will ultimately keep QCOM stock depressed for the foreseeable future. Advanced Micro Devices (AMD)Source: AMD The story at Advanced Micro Devices (NASDAQ:AMD) is a bit different than the story supporting other chip stocks at the current moment.Specifically, the story at AMD is actually much better. AMD has taken an innovation lead over competitor Intel (NASDAQ:INTC) in the CPU market, and it has leveraged that innovation lead to rapidly grow market share over the past several quarters. This market share expansion has driven out-sized revenue growth and margin expansion, which has produced robust profit growth. This market share expansion narrative projects to persist for the foreseeable future, meaning AMD should continue to report pretty good numbers.But, this market share expansion is happening in a market that's struggling with falling demand. At the core of this falling demand is reduced cloud data-center spend from the titans of tech. This spend reduction is a temporary phenomena. But, so long as it lasts, AMD's numbers won't be as good as they need to be, to support the stock's near 50-times forward multiple. * 10 Tech Stocks to Buy Now for 2025 As such, while the story at AMD is better than the story for other chip stocks, the stock is not exempt from macro demand headwinds, and those macro demand headwinds could ultimately hinder the richly valued AMD stock from rallying much further. Nvidia (NVDA)Source: Shutterstock When it comes to shares of GPU giant Nvidia (NASDAQ:NVDA), you have a situation of near-term pain and long-term gain.In the near term, Nvidia will continue to struggle with inventory and pricing issues as cloud data-center spend moderates against the backdrop of a slowing global economy and rising geopolitical tensions. So long as these inventory and pricing issues remain, revenue growth at Nvidia will remain tepid, while margins will remain under pressure. NVDA stock will struggle to rally.In the long term, Nvidia will work through these inventory and pricing issues since secular tailwinds support robust demand for the next several years in the data and AI-related markets that Nvidia services. Once those issues are cleared, big revenue growth will come back into the picture, as will margin expansion. This combination will power healthy profit growth, and that healthy profit growth will drive NVDA stock higher.Net net, the situation at Nvidia is one defined by near-term pain and long-term gain. Thus, depending on your time horizon, NVDA stock is either an avoid here, or a good buy. Texas Instruments (TXN)Source: Shutterstock Over at semiconductor giant Texas Instruments (NASDAQ:TXN), you have a chip stock that has worrisome exposure to the slowing global auto market.Texas Instruments views the industrial and auto markets as the best markets in the semiconductor space, and as such, has focused their resources on maximizing exposure to those markets. Over 50% of revenues now come from the auto and industrial markets. Four to five years ago, that number hovered around 40%.The problem here is that the auto market is fading globally. China auto sales have been tumbling for several months. The U.S. auto market has been weak lately, even with low interest rates. The European auto market is seeing declines for the first time since 2013. Broadly, after several years of red-hot growth, the global auto market is in retreat, and that's not good news for Texas Instruments. * The 10 Best Index Funds to Buy and Hold At the same time, TXN stock isn't cheap for a semi stock, trading at 20-times forward earnings. That combination of a not-cheap valuation and mounting headwinds in the company's most important market, ultimately means that TXN stock may not have much room for further upside in the foreseeable future.As of this writing, Luke Lango was long QCOM and INTC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post 6 Chip Stocks Staring At Big Headwinds in 2019 appeared first on InvestorPlace.
Semiconductor stocks have spiraled upwards today. The VanEck Vectors Semiconductor ETF (SMH) is up 4.6% currently, while the iShares PHLX SOX Semiconductor ETF (SOXX) is up 4.9%. Though trade war concerns remain, some stocks like NVIDIA might be undervalued due to their recent declines.
(Bloomberg) -- Shares of semiconductor companies rallied on Tuesday as optimism that trade tensions between the U.S. and China could be easing pushed investors to look past a growing consensus that an industry rebound is unlikely to occur in the second half of the year.The Philadelphia semiconductor index advanced as much as 5%, compared with a 1.4% increase in the S&P 500 Index. Among notable gainers, Nvidia Corp. rose 6.8% while Micron Technology Inc. jumped 6.8% and Western Digital Corp. added 6.4%. Texas Instruments Inc. gained 4.2% while Intel Corp. rose 4%.The advance came after President Donald Trump said he had a “very good” phone conversation with Chinese President Xi Jinping and that he would hold an “extended meeting” with him at the G-20 meeting. Trump had previously threatened to raise tariffs if Xi didn’t sit with him at next week’s meeting in Japan.Chipmakers have been highly correlated to the trade issue, as the companies derive a hefty percentage of their revenue from China. The country is also a key part of their supply chains. Recently, semiconductor volatility rose after the Trump administration blacklisted Huawei, a major consumer to a number of semiconductor companies. Last week, Broadcom Inc. cut its full-year sales forecast because of trade risks and its Huawei exposure.“Huawei casts a large shadow,” Stifel analysts wrote on Tuesday. “There is no getting around its significance.” Analyst Brian Chin lowered his estimates for a number of semiconductor companies for the second half of the year, saying that the industry’s “malaise” in May was “now too acute to ignore.”That view was echoed by analysts at KeyBanc Capital Markets in a report dated June 17. The firm wrote that “the recent U.S./China trade war escalation, including the Huawei ban, has dashed hopes for a 2H recovery for broad-based semiconductors.” Analyst Weston Twigg added that a trip to Asia “left us more cautious” on the industry, and that there was an “increased risk to forward estimates” as the trade dispute “has led to a meaningful decline in bookings.”Deutsche Bank analysts recently returned from an Asia trip of their own, emerging “more cautious on the semiconductor and semicap sectors” as a result, “especially given that the often promised H2 rebound is looking increasingly optimistic.”Analyst Rob Sanders wrote that trade tensions were “significantly elevating uncertainty surrounding near- and mid-term business conditions,” and that “in most instances, this uncertainty is acting as a headwind to demand.”The escalation in trade-related tensions came at a time when the industry has already been struggling with weak demand and high inventory levels. According to the Semiconductor Industry Association, total semiconductor sales sank 17.7% in April, its most recent month of data.To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Jennifer Bissell-Linsk, Richard RichtmyerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Micron's (NASDAQ:MU) situation continues to deteriorate. With its margins waning and its revenue and profitability falling, MU stock price has fallen meaningfully from its highs. Just two months ago in April, Micron stock was trying to break out and exceed $45. What happened?Source: Shutterstock While the trade war was seemingly heading towards a friendly resolution a few months ago, a tweet from President Trump sent those assumptions down the drain. The tweet sank the stock market, as the PowerShares QQQ ETF (NASDAQ:QQQ) calmly shed 11.5% in the month of May.However, it's had a much more devastating impact on semiconductors, chip makers and memory producers. For instance, Nvidia (NASDAQ:NVDA) tumbled more than 23% in May, MU stock dropped almost 26% from peak to trough and Lam Research (NASDAQ:LRCX) dropped roughly 18%.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Stocks to Buy for $20 or Less Comments that Broadcom (NASDAQ:AVGO) made in conjunction with its second-quarter results didn't help. On Thursday evening, the chip maker said it expects first-half headwinds to persist in the second half of the year, after previously expecting them to lift. That caused Broadcom to issue full-year revenue guidance that was well below analysts' average estimate ($22.5 billion vs. $24.31 billion), inflicting even more pain on the group. What About the Valuation of Micron Stock?Too many people look at MU stock and assume it's a buy because of its low valuation. Many understand how price-earnings (P/E) ratios work, but some don't. They see Micron stock trading at four or five times its earnings and say, "That's a buy to me!"What they don't consider is the very basic equation of the P/E ratio. Quite simply, the ratio is price divided by earnings. When a company's stock falls and its earnings stay flat, its valuation or P/E ratio falls, making it more attractive. However, when companies' earnings fall, their stocks become more expensive.When both price and earnings fall -- which is what's been happening to Micron -- the company's P/E can remain almost constant. Last July, MU stock was trading at almost $60. Analysts' average estimate called for earnings of almost $12 per share during the fiscal year, giving MU stock a forward P/E ratio of about five. Fast forward to June 2019 and the forward consensus earnings estimate has cratered almost 50%, down to $6.35 per share. So, too, has the stock price, which is also down almost 50%.That's not surprising. The decline in estimates, in conjunction with the decline of MU stock, has kept the P/E ratio relatively constant. Thus, MU stock isn't that much cheaper now than it was in the past. Micron's Underlying BusinessNAND memory is a component of Micron's business, making up roughly 30% of its total revenue last quarter. However, another form of memory, DRAM, is the largest piece of MU's pie, making up 64% of its total revenue.Micron's President and CEO, Sanjay Mehrotra, said this about NAND and DRAM:"NAND markets remain oversupplied from the acceleration in bit growth driven by the industry transition to 64-layer 3D NAND. Although fiscal Q2 pricing came in below our expectations, we are optimistic that demand elasticity and seasonal trends will support improving demand growth in the second half of the calendar year.Since our last earnings call, DRAM pricing weakened more than expected. Our demand outlook for calendar 2019 has moderated, led by somewhat greater levels of customer inventory, weakening server demand at several enterprise OEM customers and worse-than-expected CPU shortages."Other executives have made unfavorable observations about memory:Anthony Neri, president and CEO of Hewlett Packard Enterprise (NASDAQ:HPE): "So the overall commodity environment continue to be favorable and there is an oversupply now compared to last year's as you recall there was shortages and costs going up. The DRAM prices are down."Dion Weisler, CEO of HP Inc (NASDAQ:HPQ): "I think broadly speaking, we have seen some easing around the overall supply chain costs in the basket of commodities and logistics."Kelly Kramer, CFO of Cisco Systems (NASDAQ:CSCO), also said the company was benefiting from reduced DRAM prices. Trading MU Stock Click to EnlargeMicron's price action was very discouraging last week , with MU stock topping out near $36. It's now down about 8% from those levels.If MU stock falls below Friday's lows, it could be in some trouble. Those lows buoyed Micron stock in late May and early June. If they can't do so now, then MU stock could tumble to $30. If the selling pressure doesn't relent, it could continue even lower.Now that semis and tech have caught a bid, see if Micron can hurdle $34 and its 20-day moving average. Otherwise, Micron stock looks risky on the long side in the short-term, particularly with a percolating trade war.With all that said, Micron is a boom-bust company. When its business is tough -- like now -- the ride is rough for investors. When its business is good -- and it eventually will be -- MU stock will be a huge winner. Even if MU slides further from here, it will likely be a good hold over the long term. DRAM and NAND aren't going anywhere, and neither is MU stock.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Should Micron Stock Be Bought or Sold? appeared first on InvestorPlace.
Apple (AAPL) is expected to launch 5G-supported iPhones in 2020, much later than other prominent smartphone manufacturers like Samsung, LG, Huawei and Motorola.
Goldman Sachs’ chief US equity strategist, David Kostin, thinks that “rising market concentration” and geopolitical tensions pose a “regulatory risk” to companies, which could harm their fundamentals.
It’s no secret that the markets overall are on a tear. The S&P 500 is up 15.1% year-to-date, while the NASDAQ is up 17.7%. Investor profits are following suit, unemployment is low, and times are good.We’d be fools not to admit all of that, but equally foolish to ignore some clouds gathering off in the distance, a spot of fog here, a patch of mist there. It hasn’t coalesced yet, but warning signs are showing up. We’ll open up the TipRanks database and take a look at three of those warnings, major companies that are sending out bearish markers in the boom. Some of these markers apply to the economy at large, while others are very much company-specific, but there’s plenty to learn from the flashing yellow lights. Boeing Company (BA)First up is the world’s largest aerospace corporation, the fifth-largest defense contractor, and the United States’ largest exporter. Boeing has long been a staple of investing portfolios, offering steady profits, reliable equity gains, and an excellent dividend. But this past March, BA shares dropped sharply and have been unable to regain traction since.The immediate reason is well known: the March 10 crash of an Ethiopian Airlines 737 MAX 8 aircraft, the second such crash of that model in less than 5 months. The accident was attributed to the same cause as the earlier October 2017 crash in Indonesia. Everyone aboard each flight was killed, and in the wake of the second accident, the world’s operational 737 MAX 8 aircraft have been grounded.Boeing has the resources to weather this setback, but is suffering from two exacerbating factors. First, the 737 is the company’s most popular commercial aircraft model, a long-time workhorse in the narrow-body airliner segment, and the MAX 8 is Boeing’s newest and most popular version of this venerable design. Halting production is a major hit to the bottom line. And second, company management has badly handled the PR around the MAX 8.The production issue is likely to work itself out, given time. Crash investigators – from the airlines, from governments, and from Boeing – have traced the cause of both accidents to a flaw in the autopilot software, and the company says it has already worked out a software patch. Once they have gained regulatory approval, and installed the fix, production and deliver of 737 MAX 8 aircraft can resume.The second issue, management’s failure at PR, is probably less easy to address. A long report in Forbes magazine, back in March, showed how Boeing’s initial response led to exactly the wrong public perception: that the company was putting liability and profit above lives. More recently, company CEO Dennis Muilenburg, referring to the MAX 8, said on June 17, at the Paris airshow, “We’ll get it back in the air when it’s safe.” While emphasizing the right them – safety and lives – his statement is still taken as tacit admission that the company was in the wrong.The result can be seen in both product sales and market performance. Boeing recorded a total of 0 new orders on the first day at Paris (while competitor Airbus tallied 123), and BA shares are down 15.7% since March 8 (the last trading session before the Ethiopian Air accident). News coverage of Boeing has been decidedly negative over past weeks, with TipRanks data showing that bearish articles make up 61% of the total. Unsurprisingly, investor sentiment is also negative, with individual portfolios in the TipRanks database showing a net pullback from BA.Despite all of this, a majority of Wall Street’s analysts see hope for Boeing. Bottom line, there are only two mega-cap commercial airliner producers in the world, and Boeing is the larger of them. This is a company that is, literally, too big to fail. With that in mind, Cowen’s Cai Rumohr (Track Record & Ratings), a five-star analyst and long-time expert on the aerospace industry, gave Boeing a ‘Buy’ rating and a $460 price target. His target suggests a 29% upside to the stock.Overall, despite the bearish signals, BA stock still has a ‘Moderate Buy’ from the analyst consensus. The average price target, $436, gives a 23% upside compared to the share price of $354.View BA Price Target & Analyst Ratings Detail Broadcom, Inc. (AVGO)The microchip industry has been giving mixed signals for years, despite the high profitability of its industry leaders. Broadcom is the world’s sixth-largest semiconductor chip company, with over $18 billion in sales last year, and it just released Q2 earnings, showing year-over-year revenue growth of 10% and an EPS beat of 1%. On the debit side, revenues did not grow enough, as the $5.52 billion reported was almost 3% lower than the $5.68 billion expected. Worse than the revenue miss, however, was the downward revision of full-year revenue guidance, from $24.5 billion to $22.5 billion. AVGO shares slipped almost 8% after the earnings report went public.Blame China, tariffs, and Trump. There are recent indications of a slowing Chinese economy, and Apple (AAPL) has revised iPhone sales forecasts down to compensate. The widely publicized trade dispute between President Trump and China has resulted in a spate of tit-for-tat protective tariffs which have been impacted trade figures in both countries. At the same time, Trump took action to limit Chinese telecom giant Huawei from purchasing US technology. Approximately 3% of Broadcom’s sales revenue comes from Huawei deals.Hock Tan, CEO of Broadcom, did not try to sugarcoat the situation, laying it out in the earnings conference call: “We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers. As a result, our customers are actively reducing their inventory levels, and we are taking a conservative stance for the rest of the year.”Despite the cautionary tone of Broadcom’s management, the pullbacks from investors, and sympathetic drops in other major chip stocks (INTC lost 1.1%, NVDA slipped 2.4%), top analysts are not ready to call it quits on Broadcom. Tech sector expert Vijay Rakesh (Track Record & Ratings), of Mizuho Securities, acknowledged all of those factors, but still saw reason for optimism: “Looking into 2020, a resolution of geopolitical tensions and bans could drive a mean reversion in stronger demand and inventory build.” Rakesh sets a $330 price target on AVGO shares, for a 24% upside.Broadcom still has a ‘Strong Buy’ analyst consensus, even after the earnings report, based on 23 buy and 4 hold ratings given over the past three months. Shares sell for $265, and the average price target of $313 gives the stock an upside potential of 17%.View AVGO Price Target & Analyst Ratings Detail Walt Disney Company (DIS)Our final bearish signal comes from Disney. The entertainment giant has seen its stocks take off this year, gaining 29% since January. Theme parks and movies, including the enormously successful “Avengers: Endgame,” have kept the company solidly in the black, while operational control of streaming service Hulu and the announcement of the new Disney+ online channel have kept investors and customers alike interested in the company’s future. It looks golden.But…Imperial Capital analyst David Miller (Track Record & Ratings) yesterday gave Disney a rare piece of bad news. He downgraded his rating of the stock, from ‘Buy’ to ‘Neutral.’ He offers several points supporting a lower rating to DIS shares:> The core rationale for lowering our rating … is simply due to the fact that the stock has performed consistent with our previous Outperform rating – up by 25.7% since we established that rating on 11/21/18, and ahead of the S&P 500, which is up 7.8% in that same span of time. Most of the catalysts we focused on at the time of that ratings change: the film slate (specifically the release of Avenger’s Endgame), the opening of the two Star Wars lands, the disposal of the Regional Sports Networks (RSNs), the Disney+ analyst day, and the re-financing of the various 21st Century Fox legacy debt tranches, have either happened, or are set to happen, and at a record multiple on 2021 earnings, are pretty much built in to the stock, in our view.Miller held his price target steady, at $147, which is 4.28% over current trading levels.So far, Miller is alone in his bearish outlook on DIS. Most analysts are focused on the company’s proven record of generating profits, especially through blockbuster movies. Miller, however, points out an important negative factor going forward, that has not yet sunk into the general consciousness, adding to his above comment: “Disney+ and streaming service Hulu are not expected to break even until 2024.”Perhaps the most important point here, for investors, is that Disney’s strong gains this year have caught it up to its price target. Where the company had an upside potential above 25% six months ago, the share price of $140 and the average target of $154 now give an upside of just 9.4%. The analyst consensus is still a ‘Strong Buy,’ as DIS has received 14 buys and 4 holds in the last three months.View DIS Price Target & Analyst Ratings Detail
The ban by the US government is expected to weigh heavily on Huawei. While revenue was growing at a robust pace of over 20.0% in the last few years, 2019 might be the first year of decline in several years. Huawei managed to grow sales by 39.0% YoY in the first quarter of 2019. It now expects smartphone shipments to fall between 40.0% and 60.0% in 2019.
Apple (AAPL) is holding out hope that China will target it as its trade war with the US escalates. The US last month blacklisted Huawei, leading US suppliers to give the Chinese technology star a wide berth. Google has reduced its business dealings with Huawei, while Microsoft (MSFT) has stopped selling Huawei laptops on its digital shop.
Broadcom (AVGO) has secured a fresh component supply contract from Apple, according to a regulatory filing. Broadcom is already an Apple supplier, supplying the customer with components that go into products such as the iPhone and iPad. The new contract calls for Broadcom to supply Apple with radio-frequency components and modules for use in making Apple’s smartphones, tablets, and smartwatch devices.
Intel (NASDAQ:INTC) stock is cheap. The Intel stock price sits at just over 10 times earnings. Combined with a 2.7% dividend yield, there's a value case for INTC stock at current levels.Source: Shutterstock But I've been skeptical about that case for some time -- and recent developments don't change my mind. Fundamentally, Intel stock looks cheap. As a business, however, there are plenty of reasons why that is, and should be, the case. Fundamental Concerns for INTC StockIntel stock was rolling not all that long ago. As of mid-April, the Intel stock price had risen nearly 30% in 2019 alone. And then first-quarter earnings sent the stock plummeting. INTC stock dropped 9%, wiping out some $23 billion in market value. * 7 Top-Rated Biotech Stocks to Invest In Today The catalyst was reduced guidance for 2019. Analysts and investors had been looking for a rebound in the second half of the year, after what looked like an early-year pause in datacenter spending. Intel's guidance undercut that case.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIntel followed up a little over two weeks later with its three-year outlook -- and that, too, disappointed. Intel is looking for flat sales in PCs -- which investors might see as overly optimistic. Gross margins are going to be pressured amid Intel's 10nm ramp. Three-year revenue growth, on the whole, even with double-digit growth in datacenter, is supposed to be in the low single digits.It's worth remembering that in both cases, INTC stock fell -- and not because of investor overreactions. The guidance is coming from Intel itself and, in combination, it suggests that Intel's growth is going to be rather meager for three years. Cyclical semiconductor stocks with minimal growth aren't going to see big earnings multiples, which, alone, suggests that the Intel stock price at least is in the right ballpark. How Many Mistakes?There's a broader problem with the disappointing guidance, however. It's difficult for investors to trust Intel at this point, after a series of missteps. As Dana Blankenhorn pointed out last month, Intel is four years late in 10nm; Taiwan Semiconductor (NYSE:TSM) already is at 7nm.Last year, it was discovered its chips were susceptible to hackers. This year, chip shortages have put its datacenter lead at risk, allowing Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) to take share in a market that Intel once dominated.In CPUs, Intel seems at risk as well. AMD's new Ryzen line has been a hit. Intel's shortages are frustrating customers like Dell Technologies (NASDAQ:DELL). Intel's long dominance in PCs may have allowed it to rest on its laurels; it does not, at the moment, have an answer for AMD's rise.So, can investors trust that PC revenue is going to stay flat -- when AMD clearly is taking market share? Is datacenter revenue going to rise double-digits every year when Intel can't keep up with even slower demand? Guidance was disappointing -- and it looks far from certain Intel will be able to even meet its projections.The fundamentals don't look great. The qualitative aspects look even worse. Nvidia and, in particular, AMD clearly are taking share. Intel not only doesn't have an answer right now, it actually seems to be shooting itself in the foot. Given trade war concerns and overall chip weakness, there are plenty of reasons for investors to be worried. The Intel Stock Price Can Get CheaperAll told, it's not a surprise that Intel stock has fallen so far. Indeed, it wouldn't be surprising if Intel stock fell further. 2019 expectations clearly are at risk. 2020 and 2021 growth doesn't look particularly impressive. In a chip space with no shortage of cheap stocks -- think Broadcom (NASDAQ:AVGO) and Qualcomm (NASDAQ:QCOM), to name two -- INTC hardly looks like an attractive pick. * 10 High-Yield Monthly Dividend Stocks to Buy Admittedly, that could change. But it requires that Intel start fixing its mistakes -- and start improving its products. It seems we're still a ways off on both fronts. Until then, INTC is likely to trade sideways at best.As of this writing, Vince Martin has a bullish options position in Dell Technologies. He has no positions in any other securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post Repeated Mistakes Are Bound to Haunt Intel Stock appeared first on InvestorPlace.
Intel (INTC) is acquiring networking technology startup Barefoot Networks. Although the financial terms of the deal have not been disclosed, what is obvious is that the deal opens a path for Intel to diversify its chips business and move into the chip technology market.
, which last week cut its sales guidance for its current fiscal year by $2 billion due to both a Huawei parts ban and weaker demand from other clients, will see its chip sales to Apple bounce sharply next year. Analyst Ming-Chi Kuo, who has had a fairly high accuracy rate over the years when it comes to Apple product scoops, says that Apple plans to launch 5.4-inch and 6.7-inch flagship iPhones in 2020, along with a new, relatively low-cost, 6.1-inch iPhone (by comparison, the iPhone XS and XS Max have 5.8-inch and 6.5-inch displays, respectively).
Siltronic, a German maker of wafers used to make silicon chips, became the latest firm in the semiconductor industry to warn that U.S. restrictions on exports to China would hit sales and profitability. Munich-based Siltronic, in a statement issued after market hours on Monday, said it expected second quarter sales to be "significantly below" first-quarter levels, with a further decline likely in the third quarter. "Siltronic AG currently sees a continuing slowdown of the semiconductor industry, which is driven by geopolitical uncertainties, and the negative impact of export restrictions by the U.S. government against Chinese technology companies," the German company said.