Nasdaq AAPL Apple

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It’s no doubt that Apple AAPL and Alphabet GOOGL are two of the major winners in the technology realm. Pushing boundaries, spurring innovation, and releasing cutting-edge technology are a few of the reasons why they have been leaders in the market alongside the uprising o

What happened Rather uncharacteristically, shares of Apple (NASDAQ: AAPL) were outpaced by the S&P 500 index on Monday. The company's stock bumped only 0.2% higher, while the index notched a comparatively mightier 0.6% increase. The usually buoyant company was hit with a fres

Wall Street's main indexes closed a seesaw session higher on Monday, as investors bought in to technology names in the last hour of trading amid bets they had been overly beaten down ahead of this week's Federal Reserve meeting.

Wall Street's main indexes seesawed throughout the session to close higher on Monday, as investors sought to pick up technology names that had been beaten down in recent days ahead of this week's Federal Reserve meeting.

Monday, May 2, 2022 

Wall Street's main indexes dropped on Monday, giving up early gains in volatile trading, as investors adopted a cautious tinge ahead of the Federal Reserve meeting this week where policymakers are widely expected to raise interest rates.

Activision Blizzard Inc shares rose on Monday after Warren Buffett said his company Berkshire Hathaway Inc had taken a 9.5% stake in the video game maker, which Microsoft Corp has agreed to buy for $68.7 billion.

In this Motley Fool Money podcast, Motley Fool analyst Jason Moser discusses:

The ESG ETF space has since struggled to raise funds, mainly as it wasn’t particularly profitable or easy to understand for do-good investors. But a younger and more eager generation to save the world is driving “a greater acceptance of ESG as an investment approach.”

Technology giant Apple, Inc. (NASDAQ: AAPL) offers consumer electronics, software, and online services. It designs, manufactures, and sells smartphones, personal computers, tablets, wearables, and accessories. Its products include the iPhone, Mac, iPad, Apple TV, Apple Watch, Beats products, HomePod and AirPods.

The company’s services segment comprises AppleCare, cloud services, digital content offerings like the App Store, and other content services such as Apple Arcade, Apple Music, Apple News+, Apple Fitness+, and Apple TV+. It also has payment services such as Apple Card and Apple Pay, as well as advertising and licensing services.

5G Modem Chips

A recent report published by The Wall Street Journal stated that Apple plans to design the wireless modems of its iPhone, iPad, and Apple Watch. It currently uses 5G modems manufactured by Qualcomm (NASDAQ: QCOM).

Explaining how these modems were created, Durga Malladi, head of 5G and mobile infrastructure at Qualcomm, said, “Achieving those blistering-fast speeds has put unprecedented demands on the creativity of engineers, who have delivered a 100-fold increase in peak data-transfer rates in the past 10 years. And all of this has had to happen while keeping phones more or less the same size, and without requiring a comparable increase in the capacity of batteries.”

Apple has kept its plan under the wraps, but there have been a lot of signs that indicate Apple is working on making its own 5G modem chips.

In 2019, the company signed an agreement to acquire a majority stake in Intel’s (NASDAQ: INTC) smartphone-modem business. This acquisition includes a workforce of 2,200 people. Apple has also been hiring engineers with related expertise.

Apple’s decision to design its own chips will give it several advantages over its competitors, with cost being the first.

Wayne Lam, Senior Director of Research at technology consulting firm CCS Insight, said, “According to a recent analysis, the chips that allow the phone to connect to cell networks collectively cost as much or more than the A15 processor and its attached memory chips.”

“For decades, the main processor of the device has been more complicated and expensive than the parts that allow it to communicate wirelessly.”

Lam further said, “Another big advantage Apple could gain is that, by integrating its own modems onto the same A-series chip that powers its phones, it could tweak them in ways that would make them faster, more efficient, and more capable than what’s possible with the current combination of its own chips and Qualcomm’s.”

Creating its own modems could also help Apple improve the connectivity of its smaller devices like the Apple watch and future smart glasses, he added.

Meanwhile, Prakash Sangam, Director of Marketing at Qualcomm, said, “People often compare how Apple developed its A-series chipsets on their own, and how quickly they were able to up their game, but in some ways, a modem is more complex. In part, that complexity arises because a modem must handle such a wide variety of circumstances that can interfere with a signal.”

Analysts expect Apple to unveil its own-designed 5G modem next year.

Wall Street's Take

Based on 21 Buys and five Holds, Apple has a Strong Buy consensus rating. The average Apple price target of $191.04 implies nearly 22.9% upside potential from current levels. Shares have gained 19.7% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Apple’s performance.

According to the tool, AAPL’s website traffic registered a 5% rise in global visits in March compared to February. Moreover, the website traffic has increased 492.8% year-to-date against the same period last year.

Conclusion

If Apple starts manufacturing its own 5G modem chips next year, it could open new avenues of revenue growth for the company. However, Qualcomm could take a hit, as it expects to supply only 20% of the 5G modems used by Apple in its mobile devices in 2023 compared to almost 100% now.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash. 

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Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.