Here are some things going on today in your world of tech :
Apple's China challenge
Apple's (AAPL) iPhone did better in China than some expected in the December, quarter, as reported a couple weeks ago, and Morgan Stanley's Katy Huberty expects the momentum to continue in 2018.
After reviewing various market data points for the China smartphone market, she concludes "this iPhone cycle is not the'supercycle' we previously expected."
Nevertheless, she writes, "we continue to believe that the accelerating adoption of Apple's highest end iPhone in the worlds largest smartphone market will drive active smartphone market share gains for Apple in the periods ahead."
How Qualcomm listened
Yesterday afternoon we heard from Qualcomm (QCOM) about its meeting with Broadcom (AVGO), in a press release, and this morning comes a report by Reuters's Greg Roumelioris stating that Broadcom management felt Qualcomm "listened to them but did not engage," citing multiple unnamed sources.
This morning, Qualcomm shares are down $1.15, or 1.7%, at $65.44, while Broadcom shares are up 81 cents at $248.47.
Cisco back to growth
Shares of Cisco Systems (CSCO) are up $1.74, or 4%, at $43.83, retreating from their highest levels of last night's session, after the company's better-than-expected fiscal Q2 and outlook, and its increase in its capital returns program.
Price targets are rising at several shops this morning, and bulls are largely concluding that, as they had hoped before the report, growth is back.
In fact, on the call, analysts heard a lot of the thing they wanted to hear, including CEO Chuck Robbins indicating that a 14% jump in commercial customers came from a revival of campus switching.
Raymond James's Simon Leopold, reiterating an Outperform rating, and raising his price target to $50 from $44, writes that the "core business seems to be turning for the better, despite the lag in routing and the service providers vertical," and that "healthy orders of Cisco's 9K switching platform could help bring the Campus switching business to y/y growth in subsequent quarters."
Applied in the sweet spot
Another earnings winner this morning is chip equipment vendor Applied Materials (AMAT), its shares up 33 cents, or half a percent, at $52.29, after its own increase in dividend and buybacks yesterday.
As with Cisco, no ratings changes this morning, but plenty of price target increases. And some bulls think Applied's management's commentary took apart some of bear arguments about chips generally.
For example, Stifel Nicolaus's Patrick Ho, reiterating a Buy rating, and raising his target to $71 from $66, writes that the "'big picture' commentary" on 2019 "suggests another potential $50 billion wafer front-end equipment spending year in 2019, which would further throw cold water on some of the bear thesis of'peaking cycles.'"
NetApp's holding pattern
You know who isn't a winner from last night's reports? NetApp (NTAP), its shares down $7.49, or 12.5%, at $53.15, despite the company yesterday afternoon reporting results that beat fiscal Q3 expectations, and forecasting revenue higher this quarter as well.
The problem was the gross margin, according to Barclays' s Mark Moskowitz, who notes the non-GAAP figure last quarter, 62.6%, missed his own 63.3% estimate.
Moskowitz writes that the lighter gross margin "could raise the specter of increasing competitive intensity in coming quarters."
Moskowitz, who has an Overweight rating on the shares, advises that the shares could be in a "holding pattern," at least till the April 5th analyst day.
On tap for earnings tonight, Arista Networks (ANET), Digital Realty Trust (DLR), and Impinj will follow up that disastrous profit warning from two weeks ago, hopefully explaining how things went so wrong this quarter. The stock is still down 42% since the warning.
Cheers for Salesforce
Shares of cloud computing titan Salesforce (CRM) are up $3.36, or 3%, at $112.38, after Jefferies & Co.'s John DiFucci raised his rating on the shares to Buy from Hold, and raised his price target to $132 from $97, after his "field checks" of the company's business showed him "enterprise new business growth was strong in the Americas and even stronger internationally."
Google's AdMob dilemma
Interesting article this morning by Paresh Dave of Reuters explaining the promise and peril in Alphabet's (GOOGL) Google's ad network. It has a big hit with its AdMob unit, selling spots on mobile apps. But it has given up margin in order to woo developers of apps to drive top-line revenue.