Apple (AAPL), Amazon (AMZN) and Nvidia (NVDA) made news heading into the end of this holiday shortened trading week. Here are the headlines and our take on each. AAPL YTD mountain Apple (AAPL) year-to-date performance The news: Apple smartphone sales in China reportedly lagged those of Hauwei and Xiaomi during the country’s recent Singles Day shopping event. The number of iPhone units sold fell 4% from last year during the roughly two-week sales period from Oct. 30 to Nov. 12, Reuters reported Thursday, citing data from Counterpoint Research. By comparison, Huawei and Xiaomi posted sales growth of 66% and 28%, respectively. Wedbush analyst Daniel Ives on Friday argued that Apple’s smartphone standing in Asia remains solid. Asia supply chain checks for Apple’s iPhone 15 remain “very firm,” Ives wrote, adding that the firm has not any major negative sales revisions going into the holiday season. Ives, who has an outperform rating on Apple shares, said the company is in “a major position of strength into 2024 and remains one of our top tech picks.” Shares of Apple fell slightly Friday, but remain up 52% this year. The Club take: We aren’t paying too much attention to the recent data for iPhone sales, nor do we think the figures indicate anything broader about the health of the tech giant’s business. Yes, there is smartphone competition to the iPhone in China, but Apple remains an aspirational brand there (and everywhere) because of its pricing, product quality and closed ecosystem. Similar to Ives’ take, we’re bullish on Apple’s position in the continent broadly. We are also optimistic about management’s efforts to expand into India to grab smartphone market share from the world’s most-populous country. This will further diversify Apple’s supply chain and curb downside risk from uncertain geopolitical relations with China — while opening up a massive market into which Apple can sell higher margin services. NVDA YTD mountain Nvidia (NVDA) performance year-to-date The news: Nvidia has delayed the launch of its new artificial intelligence chip for China, Reuters reported Friday, citing sources familiar the company’s plans. The H20 chip, which is designed to comply with U.S. export restrictions, will be delayed until the first quarter of 2024 due to issues from server manufacturers. This follows the U.S. government tightening its rules on selling more advanced AI chips to China, which included restricting exports of Nvidia’s H800 and A800 chips. Nvidia garners around 20% of its revenue from China, and continues to face competition from Chinese companies like Huawei. Nvidia stock fell 0.9% during Friday trading. Still, shares of the company have surged 237% this year. The Club take: The news of a delay doesn’t sway our “own it, don’t trade it” view of the chipmaker. During the company’s third-quarter earnings call , management told members that sales to China and other regions would be impacted by the export restrictions. However, demand elsewhere is more than enough to result in continued growth for Nvidia. To be sure, China exports could represent a headwind to what would otherwise be a large long-term growth opportunity. However, the delay of the launch of these chips to next quarter shouldn’t result in a material near-term headwind to sales performance. The Club’s more focused on the three underappreciated aspects of the Nvidia story. This includes networking and software — which combined result in a very deep competitive moat as Nvidia becomes a one-stop shop for AI needs — and its growing, diversified customer base. These three factors carry far more weight from a long-term investment perspective than a few-month delay of an AI chip destined for China. AMZN YTD mountain Amazon (AMZN) performance year-to-date The news: Amazon’s Prime Video will exclusively stream the Miami Dolphins and the New York Jets as the teams compete in the National Football League’s first-ever Black Friday game. As a part of a partnership with the NFL, the broadcast will also feature QR codes on the screen that link to some of Amazon’s Black Friday deals in an effort to push the company’s e-commerce sales. Shares of Amazon, up nearly 70% year-to-date, declined 0.6% on Friday. The Club take: The deal between Amazon and the NFL is just another sign that mega-cap tech is coming after traditional TV assets, a move that will help open up additional advertising real estate. Overtime, more traditional TV content could also open up sales opportunities as Amazon can serve up ads based on an even better understanding of consumer preferences. By way of QR codes, we even begin to see the rise of television commerce, known as “T-Commerce,” for Amazon through this NFL deal. This gives viewers the ability to order products on Amazon’s platform while streaming content in real-time, helping Amazon grow synergies between its online shopping and TV businesses. Additionally, the game serves as a reminder that Amazon is continually increasing the value of a Prime membership. Not only does that support another price hike in the future, but it also serves to make the subscription service increasingly more difficult to quit. In the end, it’s not a needle mover but it does represent another incremental increase in value for customers, and over time, those incremental upgrades translate into billions of dollars in sales. (Jim Cramer’s Charitable Trust is long AMZN, AAPL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Apple (AAPL), Amazon (AMZN) and Nvidia (NVDA) made news heading into the end of this holiday shortened trading week. Here are the headlines and our take on each.
Read the full article here
News Room
