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Business Insider
3 days ago
- Business
- Business Insider
Apple is the worst-performing Mag 7 stock this year. Here's what analysts and investors say about whether you should buy the dip.
It's been a rough year for Apple. Shares of the iPhone maker were down 20% year-to-date through Thursday's close, making it the worst-performing Magnificent Seven stock in 2025. The only other stock in the mega-cap cohort that's down this year is Alphabet, which has lost about 9%. Analysts say the decline has been brought on by a whirlwind of factors outside the tech giant's control, like the trade war, but its plunge this year could be a buying opportunity for long-term investors. Angelo Zino, a senior equity strategist at CFRA Research, said investors are mainly fretting over the impact of tariffs. The vast majority of Apple's iPhones are assembled in China, which could leave the firm more exposed to the impact of price increases. President Donald Trump has also singled out Apple, calling for the company to make iPhones in the US or else pay a 25% tariff. While Trump's trade war hit legal stumbling blocks this week, the court battles add another layer of uncertainty to how the trade war could play out. Apple, Zino said, is uniquely exposed to trade headwinds. " Hardware is kind of in the middle, or in the eye of the storm, when it comes to the policy uncertainty, the tariff uncertainty that's sitting out there," Zino said, referring to how most tech hardware is manufactured abroad. James Demmert, the chief investment officer at Main Street Research, also thinks Apple's decline in the stock market this year is due to the company's lack of "game-changing" products. It was also late in implementing AI in its phones, and AI hasn't yet stimulated a boom in demand for iPhone upgrades. "In terms of a new creative, blockbuster device or applications, the future is still uncertain," Demmert told BI. But, overall, many are still optimistic about the tech titan's prospects and its ability to navigate the trade war. Here's what analysts and investors say about what's ahead for the stock — and whether it's time to buy the dip. Goldman Sachs: Buy Apple stock looks attractive on the basis of historic price-to-earnings, Goldman Sachs said this month. The bank's analysts said big risks to the stock include weakening consumer demand, potential disruptions to Apple's supply chain, and the possibility that Apple will be under increased regulatory scrutiny in key markets. Still, Apple is on track to continue growing, the analysts said, pointing to the "durability" of its revenue and product ecosystem. Goldman has a "buy" rating for the stock and a 12-month price target of $253, implying 27% upside. UBS: Neutral Apple might not be that affected if Trump follows through with a 25% tariff on iPhones, and the stock could rise slightly from current levels, UBS said. If Trump implements a 25% tariff on phones not made in the US, that would likely only impact around 2% of Apple's annual earnings per share, the bank estimated. The firm has a "neutral" rating on Apple stock and $210 price target, implying 5% upside from current levels. CFRA Research: Buy For long-term investors, it's the right time to buy Apple stock, CFRA's Zino told BI. The long-term growth trend for the stock looks intact, he said, and uncertainty surrounding tariffs and regulatory issues in China are likely to smooth out in the coming months. "We believe that yes, it is a buying opportunity," Zino said of the stock's decline, predicting that the company's pricing and brand power could make it better positioned to pass along the cost of tariffs to consumers. Main Street Research: Buy Main Street's Demmert also thinks the stock is a buy despite uncertainty about its product roadmap and what the company might do next to reignite excitement about the brand. "We think all of the bad news is in the current price of shares," Demmert told BI. "In terms of AI and the China trade war, we expect significant improvement in the back half of the year, making the shares attractive at these levels." Wedbush Securities: Buy Wedbush analysts wrote this week that Apple is equipped to navigate the headwinds from tariffs. The firm said that Apple remains one of its top picks in the tech sector for 2025. They pointed to how CEO Tim Cook told investors that around 50% of iPhones being manufactured for sale in the US were now being assembled in India, in order to avoid tariffs imposed on goods imported from China. "It feels like Apple has a very good grip around this very complex tariff issue with Cook being 10% politician and 90% CEO," they wrote. The firm reiterated its "outperform" rating and $270 price target on the stock, implying 35% upside from current levels. Melius Research: Buy The research firm said it believed that Apple is "misunderestimated" by investors. While the near-term outlook for Apple looks "quite choppy," the Company has an installed base of around 2.4 billion devices. Analysts wrote that Apple is also working on higher-priced variations of the iPhone and could have new initiatives related to its AI and services businesses underway. The firm issued a "buy" rating and $240 price target for the stock, implying 20% upside from current levels. Clockwise Capital: Sell Clockwise Capital's chief investment officer, James Cakmak, said the firm had completely exited its position in Apple stock because tariffs make it too risky to hold, he told CNBC last week. "What this simply creates is a no-win situation for anybody. Apple loses, consumers lose. And there's no getting around it," Cakmak said, referring to President Donald Trump's threats of tariffs on the company. "It's not something we think will derail the company in a material fashion. At the same time, as an investor, you have to look elsewhere other than Apple."
CNA
3 days ago
- Business
- CNA
Marvell forecasts second-quarter revenue above estimates on strong demand for custom AI chips
Marvell Technology forecast second-quarter revenue above Wall Street estimates on Thursday, betting on strong demand for its custom chips powering artificial intelligence workloads in data centers. Demand for custom AI chips continues to fuel growth, while networking chips and electro-optics have also seen robust order momentum. These advancements help hyperscalers seeking to scale their infrastructure to support AI workloads. Marvell said in its post-earnings call that it expects AI tailwinds to remain strong, driven by robust hyperscaler spending, new sovereign data center projects, and the expansion of emerging market players expanding the market, opening up growth opportunities. Revenue from Marvell's data center segment, which accounts for 76 per cent of the company's total revenue, stood at $1.44 billion in the first quarter. The company's carrier and enterprise networking segments have also gradually recovered following a period of inventory correction. "We believe the custom silicon business will be the primary growth driver over the next 3-5 years, contributing positively to operating profits despite lower gross margins," said Angelo Zino, analyst at CFRA Research. Zino added that the upcoming custom silicon webinar on June 17 could serve as a catalyst by potentially showcasing TAM expansion opportunities and new customer wins in CY26. However, the consumer end market remained weak for the company, with revenue falling 29 per cent sequentially to $63.1 million due to seasonality in gaming demand. The industrial segment also struggled, reporting a 12 per cent sequential decline in revenue. Shares of the company fell about 2 per cent in extended trading. The company expects second-quarter revenue to be $2 billion, plus or minus 5 per cent compared with analysts' average estimate of $1.98 billion, according to data compiled by LSEG. In May, Marvell said it was postponing its previously scheduled investor day conference due to a "dynamic macroeconomic environment." It reported revenue of $1.9 billion for the quarter ended May 3, compared to analysts' average estimate of $1.88 billion.
Economic Times
4 days ago
- Business
- Economic Times
AI personal shoppers hunt down bargain buys
Live Events Internet giants are diving deeper into e-commerce with digital aides that know shoppers' likes, let them virtually try clothes on, hunt for deals and even place rise of virtual personal shoppers springs from generative artificial intelligence (AI) being put to work in "agents" specializing in specific tasks and given autonomy to complete them independently."This is basically the next evolution of shopping experiences," said CFRA Research analyst Angelo Zino. Google last week unveiled shopping features built into a new "AI Mode".It can take a person's own photo and meld it with that of a skirt, shirt or other piece of clothing spotted online, showing how it will look on AI adjusts the clothing size to fit, accounting for how fabrics drape, according to Google head of advertising and commerce Vidhya can then set the price they would pay and leave the AI to relentlessly browse the internet for a deal -- alerting the shopper when it finds one, and asking if it should buy using Google's payment platform."They're taking on Amazon a little bit," Techsponential analyst Avi Greengart said of tool is also a way to make money from AI by increasing online traffic and opportunities to show ads, Greengart Silicon Valley tech titan did not respond to a query regarding whether it is sharing in revenue from shopping added a shopping feature to ChatGPT earlier this year, enabling the chatbot to respond to requests with product suggestions, consumer reviews and links to merchant AI late last year began letting subscribers pay for online purchases without leaving its in April added a "Buy for Me" mode to its Rufus digital assistant, allowing users to command it to make purchases at retailer websites off Amazon's head of technology Hari Vasudev recently spoke about adding an AI agent to the retail behemoth's online shopping portal, while also working with partners to make sure their digital agents keep Walmart products in payment networks Visa and Mastercard in April each said their technical systems were modernized to allow payment transactions by digital agents."As AI agents start to take over the bulk of product discovery and the decision-making process, retailers must consider how to optimize for this new layer of AI shoppers," said Elise Watson of Clarkston are likely to be left groping in the dark when it comes to what makes a product attractive to AI agents, according to Zino does not expect AI shoppers to cause an e-commerce industry upheaval, but he does see the technology benefitting Google and only do the Internet rivals have massive amounts of data about their users, but they are also among frontrunners in the AI race."They probably have more information on the consumer than anyone else out there," Zino said of Google and company access to data about users hits the hot-button issue of online privacy and who should control personal plans to refine consumer profiles based on what people search for and promises that shoppers will need to authorize access to additional information such as email or app a chatbot with one's buying decisions may spook some people, and while the technology might be in place the legal and ethical framework for it is not."The agent economy is here," said PSE Consulting managing director Chris Jones."The next phase of e-commerce will depend on whether we can trust machines to buy on our behalf."
New Straits Times
15-05-2025
- Business
- New Straits Times
Walmart warns of higher prices due to tariffs
NEW YORK: Walmart on Thursday reported another solid quarter but warned of price increases due to President Donald Trump's tariffs on China and other major trading partners. "We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels, we aren't able to absorb all the pressure," Chief Executive Doug McMillon said in a conference call with analysts. Executives with the big box store chain welcomed the de-escalation of the US-China trade war announced this week, but said the levies on China remained too high. The tariffs have a particularly strong impact on items such as electronics and toys. Consumers will begin to see more price increases in the latter part of May, with a more noticeable impact in June, said Chief Financial Officer John David Rainey. "If you've got a 30 per cent tariff on certain items, you'll likely see a double digit" price increase, Rainey said in an interview with Yahoo Finance. Walmart officials said the extent to which tariffs are passed on to consumers will depend on the individual item. Rainey said Walmart saw an opportunity to play "offense" with some products, meaning the retail giant could absorb more of the tariff to keep prices lower and boost its market share. "We could see higher prices on some non-tariffed items and stable or even lower prices on some tariffed products," said CFRA Research senior equity analyst Arun Sundaram. The comments came as Walmart reported profits of US$4.5 billion, down 12.1 per cent from the year-ago level, but topping analyst expectations. Revenues rose 2.5 per cent to US$165.6 billion. The retail giant posted a 4.5 per cent rise in first-quarter comparable sales in Walmart's US stores behind another robust performance in groceries. McMillon said Walmart's scale enables it to absorb tariffs on some items without passing them on to consumers. In some cases, suppliers have shifted to materials without tariffs such as fiberglass instead of aluminum, which has a tariff. McMillon flagged tariffs on countries like Costa Rica, Peru and Colombia on items such as bananas, avocados, coffee and roses. "We'll do our best to control what we can control in order to keep food prices as low as possible," McMillon said. Besides China, Walmart imports heavily into the United States from Mexico, Vietnam, India and Canada. The Trump administration is at various stages of negotiation following the president's sweeping April 2 announcement that affected all US trading partners. While maintaining its full-year projections, the company did not offer a range on its second-quarter profit outlook, citing uncertainty around US trade policy. Neil Saunders, managing director of GlobalData, said Walmart was better positioned than other retailers amid the tariffs because of the importance of grocery, a category where "consumers will continue to prioritize spending out of necessity," he said in a note. "Although the waves caused by tariffs now seem to be calmer, it would be incorrect to assume that the waters are completely safe. There will be a lot of further disruption ahead," Saunders said, adding that Walmart is "one of the sturdiest ships" in retail. Shares initially rallied on the earnings, but fell after Walmart's comments on pricing increases. CFRA analyst Sundaram said the fall in shares reflected investor disappointment that Walmart didn't raise its full-year outlook after recent positive developments on the tariff front. "Uncertainty grew when Walmart chose not to provide second-quarter profit guidance," Sundaram said. "While we still believe the company can exceed its full-year operating profit and (earnings) forecasts, we now expect more earnings volatility over the next few quarters compared to our initial projections." - AFP
Yahoo
15-05-2025
- Business
- Yahoo
Inside the historic $8 trillion market comeback
In early April, Wall Street threw a temper tantrum that would make a toddler proud. Fearing President Donald Trump's chaotic trade war would ignite a global recession, investors scrambled to dump US assets. The rare simultaneous selloff of both stocks and bonds reflected a serious loss of confidence in White House policy. Then Trump changed his tune. The president paused so-called 'reciprocal tariffs' for 90 days and later slashed tariffs on China, though many items still face higher tariffs than before the Trump administration. US stocks reversed course, too, setting off a historic rally on Wall Street in the past month. The S&P 500 has now fully erased the year's losses and gained nearly $8 trillion in market value since its April 8 lows. It's a remarkable comeback that underscores palpable relief among investors and easing recession fears since Trump's stunning reversal. 'The markets had a tantrum and stomped their collective feet and got what they wanted: Trump to back off,' Ed Yardeni, president of investment advisory Yardeni Research, told CNN in a phone interview. 'Trump realized he was toying around with liquid nitroglycerine and that it was time to back off.' The early 2025 selloff was breathtaking in its speed and intensity. It took just 22 days for the S&P 500 to close in correction territory, a 10% drop from its record highs in November — a fraction of the time it normally takes to get a correction, according to CFRA Research. The S&P 500 narrowly avoided plunging into a bear market. 'It was a free-fall moment,' said Kevin Gordon, senior investment strategist at Charles Schwab. 'Investor sentiment got to panic levels.' The recovery has been just as swift, the fastest since 1982. It took 25 trading days to go to positive territory from down 15% on the year, according to Bespoke Investment Group. In times of gloomy sentiment, investors might spark speedy rebounds when they finally see a situation change. 'Investors think the worst is likely over and that the reason for the panic has largely been undone,' said Sam Stovall, chief investment strategist at CFRA Research. The whipsaw action in markets underscores how hard it is for even the smartest minds on Wall Street to time markets. And why Nathan Rothschild famously said, 'The time to buy is when there's blood in the streets.' The CNN Fear & Greed Index of market sentiment signaled 'extreme fear' among investors in April, crashing to three on a scale of one to 100. The gauge has since completely rebounded and is now in 'greed' territory (and heading toward 'extreme greed'). The tech sector has largely led the rally after the Trump administration's decision to exclude smartphones and other electronics from country-specific tariffs. Apple (AAPL) and Amazon (AMZN) stocks have surged more than 20% apiece since the April 8 low. Nvidia (NVDA) has spiked more than 40%. But the upswing goes broader than tech. Consumer discretionary, industrials, communication services and financials have all rallied on Wall Street in the past month. Each time tariffs have been dialed back, forecasters have cut their odds of a recession. The chance of a US recession is now less than 50%, according to JPMorgan Chase economists' forecast, down from 60% in early April before Trump's 90-day pause on country-specific tariffs. Goldman Sachs now sees a 35% chance of a recession, down from 45% before the US-China breakthrough on trade. And recession chances on prediction platform Polymarket have plunged from 66% to 39%. 'There was a tremendous amount of anxiety about Trump's tariffs causing turmoil and uncertainty and increasing the likelihood of a recession, not just in the US but on a global basis,' Yardeni said, adding that 'Trump couldn't afford to let this issue fester.' And the odds of a recession don't have to be zero for investors to pile back into stocks. 'If zero is knowing nothing and 10 is knowing everything, Wall Street nibbles at 3 and does full-blown buying at 5,' said Stovall. Of course, the US economy is not out of danger. US tariffs have still skyrocketed, just not as high as a few weeks ago. The average effective tariff rate stands at 17.8%, the highest since 1934, according to The Budget Lab at Yale. US tariffs on China are no longer at 145%, but they're still elevated at 30%. That's low enough to unfreeze trade but high enough to still cause price increases. And no one knows exactly how those still-high tariffs will hit the US economy – not even the Federal Reserve. 'This is still relatively extreme trade policy,' said Schwab's Gordon. The White House argues the economic damage will be minimal. Many economists expect a burst of inflation and job loss, though the magnitude is very much up for debate. The rapid recovery has spurred other investor concerns, and some worry the stock market rally is overextended. 'The market has raced from oversold to overbought in record time,' Mark Hackett, chief market strategist at Nationwide, wrote in a note on Wednesday. 'That limits near-term upside unless we see a clear reacceleration in growth.' Hackett said that without stronger growth and earnings, it will be difficult for US stocks to break out to new highs. UBS warned on Wednesday that economic data is 'poised to soften' in the coming months and that, in turn, US stocks could face a 'modest headwind.' The bank has downgraded its stance on US stocks from 'attractive' to 'neutral,' cautioning that much of the good news has already been priced in and challenging news is likely on the way. And a powerful rally does not guarantee the worst is over. CFRA's Stovall notes that in two-thirds of all bear markets since World War II, the S&P 500 ultimately made even lower lows after recovering from double-digit percentage declines. 'There is still an awful lot of uncertainty out there. We have to wait and see if this rally has legs,' Stovall said. The biggest X-factor is Trump himself and his evolving trade agenda. Markets remain one all-caps Truth Social post away from either a meltdown or a ferocious rally. 'This was a manufactured correction,' said Stovall, 'and it could be remanufactured if the president wants to change his mind about things.' Sign in to access your portfolio
