In this week’s look at the most notable stories among tech stocks, Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), Amazon.com (NASDAQ: AMZN), and Cisco (NASDAQ: CSCO) all made headlines. Let’s cover all four stocks in three stories.
1. Apple updates its MacBook Pro laptops
After a record second quarter of fiscal 2018 for its Mac revenue, Apple is attempting to capitalize on the key segment’s momentum. The tech giant announced some important updates to its MacBook Pro lineup this week.
Apple’s updated MacBook Pro. Image source: Apple.
Chief among the changes, according to Apple’s press release about the updated laptops:
- Eighth-generation Intel Core processors, “with 6-core on the 15-inch model for up to 70 percent faster performance and quad-core on the 13-inch model for up to two times faster performance.”
- Support for up to 32GB of DDR4 memory for the 15-inch MacBook Pro.
- Up to 4 TB of SSD storage for the 15-inch MacBook Pro.
- Up to 2 TB of SSD storage for the 13-inch MacBook Pro.
Moreover, the Apple T2 chip is coming to both the 15-inch and 13-inch MacBook Pros, enabling “Hey Siri” voice control on the Mac for the first time.
The MacBook Pro has been integral to Apple’s revitalized Mac revenue recently, which climbed 13% year over year in Apple’s fiscal 2017 and 6% in the trailing 12 months. Indeed, Apple credited its record Mac revenue in fiscal 2017 mainly to “great demand for MacBook Pro,” CFO Luca Maestri said in the company’s fiscal 2017 fourth-quarter earnings call.
2. Netflix analysts predict challenges
Netflix will kick off earnings reports next week, releasing the results for its second quarter on Monday. Despite the stock’s surging momentum, with shares up 150% in the past 12 months, some analysts (via Barron’s) are warning that the bullish run could face some headwinds.
Deutsche Bank analyst Bryan Kraft said he forecasts “no upside” to the company’s important member numbers in its second quarter. In addition, UBS analyst Eric Sheridan voiced concern that investors have been “binge buying” Netflix stock to the point that its valuation isn’t supported by underlying business performance.
After adding more members than in any first quarter ever in the company’s previously reported quarter, the company guided for record second-quarter member additions, too.
3. How an Amazon rumor spooked Cisco investors
Shares of Cisco took a hit on Friday, after The Information (subscription required) reported that Amazon’s enterprise cloud services segment, Amazon Web Services (AWS), may make a foray into selling its own networking switches for businesses. For its source, The Information cited “a person with direct knowledge of the cloud unit’s plans and another person who has been briefed on the project.” Cisco shares ended Friday down about 4%.
While The Information said it could take about 18 months for Amazon to begin selling networking hardware if it decides to proceed, it does make sense that Cisco shareholders would be concerned about the possible new competition. Amazon would probably be a tough competitor. AWS dwarfs cloud infrastructure competition and is growing incredibly fast. In Amazon’s most recent quarter AWS net sales climbed 49% year over year to $5.4 billion. AWS operating income rose 57% to $1.4 billion.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Amazon, Apple, and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
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