This earnings season comes against a backdrop of all kinds of economic worries and market watchers are keeping a close eye on how the tech giants perform. Leading market participants can shape the stock market’s narrative, hardly any more so than Apple (AAPL).
The world’s biggest company by market cap reports F3Q (June quarter) results today after the closing bell.
Despite macro uncertainties still impacting consumer spending, Deutsche Bank analyst Sidney Ho expects earnings to be “largely in line” with the firm and Street’s estimates, showing year-over-year growth in the low-single digits.
While Apple has warned that supply chain snags are anticipated to impact the quarter’s revenue haul by $4 billion to $8 billion, Ho thinks the company has managed its supply chain better than it thought it would. “Our checks of delivery times show most products are immediately available with a few exceptions (notably new MacBook Air), hence we see upside to the expected constraints,” the 5-star analyst noted.
Although consumer demand for smartphones and PCs has waned on account of the difficult macro environment, going by data from third party research firms, Ho is “positive” on AAPL's share gains in the segment. That said, the period has also been marked by FX issues, which have become a “bigger revenue headwind.”
Looking ahead, should Apple decide to provide any guidance, Ho thinks that as a reflection of the current operating climate, the company is likely to take a cautious approach and guide “below” present Deutsche Bank/Street expectations.
However, Ho thinks the market is already factoring in “slower growth” and notes that in order to deal with a potential economic downturn, the company intends to slow hiring and cut back on growth initiatives.
“On the positive side,” Ho sums up, “AAPL's strong cash balance should allow the company to remain aggressive in share repurchases.”
Overall, if you are looking for a “good hiding place in a volatile market,” Ho thinks Apple is the place to be. The analyst rates the tech giant a Buy, backed by a $175 price target. The figure makes room for upside of 12% from current levels. (To watch Ho’s track record, click here)
And what about the rest of the Street? It’s mostly Buys - 22, in total – while an additional 6 Holds are not enough to derail the Strong Buy consensus rating. The forecast calls for 12-month gains of 14%, considering the average price target stands at $179.53. (See Apple stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
A Democrat of California, Nancy Pelosi’s unparalleled expertise in the politics has made her a global figure. In addition to this, the U.S. politician is known for her investments in the U.S. stock market. Interestingly, the Speaker of the House of Representatives traded (bought and sold) the stocks of four mega-companies in the past year, which are as follows: NVIDIA Corporation (NASDAQ: NVDA), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: APPL), and Visa Inc. (NYSE: V).
It is worth mentioning here that shares of NVIDIA have declined 8.8% in the past year, while Visa is down 14.8%. Meanwhile, Tesla stock has advanced 27.4% and Apple is up 8.2%.
NVDA and AAPL are behemoths in the technology sector. While TSLA falls in the category of the consumer goods sector, Visa belongs to the services sector. In addition to the above-mentioned companies, the Congresswoman traded the stocks of six other companies (from the credit services, media, telecommunications, and asset management industries) in the past year.
A consolidated chart of the four mega-companies traded by Nancy Pelosi has been designed using TipRanks’ Stock Screener tool.
NVIDIA Corporation (NASDAQ: NVDA)Nancy Pelosi is in full support of the CHIPS-plus bill, which aims at offering $52 billion worth of aid to chip manufacturing companies in the United States, and $24 billion of tax credits for investments in semiconductor manufacturing. Approved by the Senate on Wednesday, the bill now awaits a go-ahead from the House and the signature of President Joe Biden. Semiconductor manufacturing company NVIDIA would be one of the beneficiaries if the bill is passed.
Shares of the $413.3-billion company grew 7.6% on Wednesday. In June 2022, Pelosi purchased 20,000 shares of NVDA (valuing within the $1 million to $5 million range). She sold 25,000 NVDA shares for $1 million to $5 million before the Senate passed the bill on Wednesday. The Sell trade was primarily to avoid any debate over her exposure to NVDA stock, especially when she is backing the CHIPS-plus bill.
The company’s prospects are solid and it has a Strong Buy consensus rating based on 25 Buys and five Holds. NVDA’s average price target of $245.55 mirrors upside potential of 38.03%.
Tesla, Inc. (NASDAQ: TSLA)The 82-years old politician purchased 2,500 shares of Tesla for $1 million to $5 million in March 2022. Shares of the electric vehicle manufacturing company have surged 27.4% in the past year, while advancing 6.2% on Wednesday. Recently, the company impressed investors with its upbeat Q2 earnings, ramped-up production levels, and efforts to improve its liquidity profile.
The U.S. government’s efforts to boost the manufacturing of electric vehicles (EV) domestically would be a boon for Tesla. Also, the CHIPS-plus bill, once cleared, could help this $804.8-billion company purchase U.S.-manufactured chips at affordable prices for its electric vehicles.
On TipRanks, the company has a Moderate Buy consensus rating based on 18 Buys, six Holds, and seven Sells. TSLA’s average price forecast of $872.28 suggests 5.8% upside potential.
Apple Inc. (NASDAQ: APPL)In January this year, the Democrat increased her stake in Apple by purchasing 10,000 shares for $1 million. The fundamentals of this high-end smartphone marker are solid, and so is its presence in the global market. However, the company is suffering from supply-chain issues and loss of business in Ukraine & Russia.
Interestingly, Apple would be able to reduce its dependence on international companies for the supply of semiconductor chips once the bill receives the green light. Shares of this $2.45-trillion company grew 3.4% on Wednesday.
Overall, the Street is cautiously optimistic about Apple and has a Moderate Buy consensus rating based on 22 Buys, six Holds, and one Sell. AAPL’s average price target is $179.53, suggesting 14.5% upside potential from the current level.
Visa Inc. (NYSE: V)Nancy Pelosi decreased her holdings in Visa by 10,000 shares in June 2022. The Sell trade was valued within the $1 million to $5 million range. Recently, the credit services provider posted upbeat results for the third quarter of fiscal 2022 (ended June 2022). The year-over-year comparisons for the top line (driven by high volumes) and bottom line were impressive.
Uncertainties in the global economy and fears of a recession in the United States are troubling Visa. Shares of this $442.7-billion company were down 1% on Wednesday. Despite exposure to these headwinds, analysts have faith in the company, which commands a Strong Buy consensus rating based on 17 Buys and two Holds. V’s average price target of $255.89 reflects an upside potential of 21.58% from the current level.
Why Is It A Good Idea to Track Nancy Pelosi’s Trading Activities?Nancy Pelosi’s portfolio, which includes investments by her family, has yielded a return of 1.11% in the last seven days. The type of companies in her portfolio (all long-term winners in their respective fields) and the timings of increasing and decreasing stakes in them tell us about her expertise in the field. Tracking the veteran politician’s stock market moves could be beneficial for investors.
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