Here are some things going on today in the world of tech:
Twitter's Ad Appeal Grows
Shares of Twitter (TWTR) are up $1.13, or 3%, at $42.55, after JPMorgan Chase's Doug Anmuth this morning reiterates his Overweight rating on the shares, and raises his price target to $50 from $39, after concluding that its " advertising momentum is strengthening, particularly among large marketers."
Anmuth's chats with ad-industry types tell him the double-digit rise in "daily average users" in the last six quarters, and the higher engagement for ads, and "better pricing as cost per engagement (CPE) continues to decline" are all helping the company's ad business.
Anmuth thinks ad revenue will "accelerate" this quarter and next. He raises his 2018 revenue estimate to $3.004 billion from a prior $2.962 billion, and raises his Ebitda estimate from $1.149 billion to $1.166 billion.
Tesla's Showroom Hums
Shares of Tesla (TSLA) are up $12, or almost 4%, at $344, after KeyBanc's Brad Erickson raised his estimates for the company's sales of its Model 3 sedan, after talking with various staff at showrooms around the country.
"Based on our conversations with 20 sales centers across the U.S. (18% of total), we believe weekly run-rate volumes have moved from the high teens per store per week to the low 30s since our last checks in mid-April," writes Erickson.
"With three weeks to go in the quarter, we estimate the Company is tracking to something between 30K and 35K Model 3 deliveries in the quarter vs. our prior view of 20K-25K. Recall in 1Q, under a similar methodology, our estimate of 8,247 came in fairly close to the Company's reported total of 8,180."
Erickson maintains a Sector Weight rating on the stock, given that "there is significant premium built into the stock." However, he also thinks bears on Tesla have a tough case to make: "We think bears need evidence that Model 3 demand is softening or that production isn't ramping. We think data points supportive of either of these points remain unlikely to emerge for at least the near term."
Apple's iPhone X Stabilizes
They've been busy at KeyBanc this morning: Erickson's colleague, John Vinh, who covers semiconductors, writes that Apple's (AAPL) iPhone sales have "stabilized," which is a good thing for chip makers. However, he finds sales of SamsungElectronics's (005930KS) " Galaxy S9 " continue to disappoint.
His perusal of evidence from carrier stores' inventory suggest to Vinh "stable sell-through of the iPhone 8/X, and in line with store expectations."
"Accordingly, days of inventory (DOI) have normalized at ~5 DOI and are consistent with healthy levels seen in past cycles."
"Conversely, sell-through of the GS9 continues to deteriorate, accompanied by an increase in DOI […] While GS9 gives us pause, stable sell-through, and normalized iPhone 8/X inventories leave us incrementally more constructive ahead of the 2H ramp of the new iPhone 9 cycle."
Arista's Enterprise Rises
Shares of networking-technology maker Arista Networks (ANET) are down 82 cents at $270.86, despite an upbeat note this morning from Jeffrey Kvaal of Instinet, who reports on his meeting at the company's San Jose offices with Chief Financial Officer Ita Brennan, which provided him with a few positive tidbits to share.
Among those is that the company's revenue this year should rise in the "upper 20s" on a percentage basis. The company's sales to "webscale" customers, meaning, cloud computing giants such as Microsoft (MSFT), are set to rise on a teens percentage basis, in keeping with last year's 15% or so, writes Kvaal. He writes that he "pressed" Brenna "for an acceleration given rising webscale capex budgets."
Her "possibly coy rejoinder was to remind us quarter-to-quarter correlations between webscale capex and Arista revenues are low as networking is
The big positive of the meeting is that the company's rise in sales into enterprise customers "may be just beginning," he writes.
"Arista has seen good growth in enterprise (financials yes, also retail and manufacturing etc.) for 3-4 quarters. This isn't only share gain. Arista believes the large enterprise market is growing as larger enterprises are choosing to hold more workloads on premise than one might have thought some years ago."
Kvaal maintains a Neutral rating on Arista stock.
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