Our indicative theme on Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones and other iDevices – is up by about 15% year-to-date, outperforming Apple stock, which is up by about 11% year-to-date. However, the broader S&P 500 has fared slightly better, rising by about 17% year to date. It’s likely that the stocks in our theme could continue to rise in the near term, for a couple of reasons. Apple is poised to launch its new iPhones this fall (likely called iPhone 13 or iPhone 12 S) and Bloomberg has indicated that Apple is likely to produce about 20% more of the new devices initially than it did for the iPhone 12. This should translate into higher volumes for Apple’s component suppliers. Moreover, Apple’s iPhones tend to use pricier components with each successive model year. For instance, the components that go into the iPhone 12 cost about 21% more compared to the iPhone 11, per Counterpoint Research. Although the changes this year are likely to be more incremental compared to last year’s big redesign, it’s likely that the cost of the bill of materials for the new iPhones will be higher, and this could bode well for Apple’s suppliers.
Within our theme, Jabil Circuit a company that makes encasements for iPhones and iPads, has been the strongest performer, with its stock rising by about 39%. On the other side, modem supplier Qualcomm
QCOM
, which is a fabless semiconductor company, has been the worst performer, declining by about 3% this year, partly due to the current chip scarcity and reports that Apple has started developing its own modem chips.
[6/7/2021] Apple Suppliers Will Continue To Outperform Apple Stock
Our indicative theme on Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones and other iDevices – is up by about 11% year-to-date, outperforming Apple stock, which remains down by about 3% year-to-date. However, the S&P 500 has fared slightly better, rising by about 13% year to date. So will the outperformance versus Apple continue? We think it will, at least in the near-to-medium term. Demand for Apple’s first generation of 5G iPhones has remained robust, with the company reporting 65% growth in iPhone sales over Q2 FY’21, with demand expanding across all geographic segments. However, much of these gains are likely priced into Apple stock. The next iPhone, likely due this fall, is expected to be a more iterative update, and Apple’s growth rates are likely to moderate significantly and this is also likely to reflect on its stock. Component suppliers, on the other hand, could see a more secular demand trend, considering that the 5G cycle is really just getting started, with mid-range and lower-end smartphone OEMs expected to launch more 5G enabled devices. These companies are also likely to benefit from demand for more sophisticated components and higher per-device content. Moreover, most of the component suppliers in our theme trade at valuation multiples that are below Apple (and the broader market) and stand to benefit as investors continue to rotate out of high-growth stocks to value names.
Within our theme, Jabil Circuit a company that makes encasements for iPhones and iPad has been the strongest performer, with its stock rising by about 36%. On the other hand, modem supplier Qualcomm, which is a fabless semiconductor company, has been the worst performer, declining by about -12% this year, partly due to the current chip scarcity and reports that Apple has started developing its own modem chips.
[3/18/2021] Apple Supplier Stocks Impacted By Semiconductor Crunch?
Our indicative theme on Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones, iPads, and other Apple devices, is up by about 4.2% year-to-date compared to the 5.3% return on the S&P 500. Demand for the new 5G iPhones has mostly been strong, with Nikkei reporting that Apple intends to produce around 230 million handsets in 2021, an increase of over 11% year-over-year. That said, there are some near-term concerns for suppliers. Semiconductor demand is outstripping supply this year, with key industries such as automotive and consumer electronics being impacted. In fact, even smartphone and memory chip behemoth Samsung has warned that it might need to delay the launch of its new Galaxy Note smartphone due to the chip supply crunch. Now although Apple – the largest smartphone maker by revenues and profits – is likely to be prioritized, some of its suppliers could feel the impact in terms of higher costs or lower volume growth.
[2/16/2021] Apple Supplier Stocks Are Riding Strong iPhone Demand
Our indicative theme on Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones and other Apple devices – is up by about 37% since the end of 2019, compared to a gain of about 22% on the S&P 500. The theme has also returned about 7.5% year-to-date, versus 5% for the S&P 500. Much of the gains have come from the launch of the iPhone 12, which has seen stronger than expected demand. iPhone revenues jumped by around 17% over Q1 2021 and the device helped Apple post its largest-ever holiday quarter. This has had a positive impact on Apple suppliers across the board, with all seven companies in our theme beating earnings expectations over their most recent quarterly reports. Within our theme, the strongest performer year-to-date has been Skyworks Solutions which is up around 24% driven by a significant earnings beat. On the other hand, Qualcomm stock has lagged, declining by about 3% year-to-date, as its revenues over the most recent quarter fell slightly short of expectations. Moreover, there were reports in December that Apple had started working on its own modem chips for future devices and this also likely hurt Qualcomm stock.
Will this momentum hold up for Apple suppliers? It seems likely. Several iPhone models remained back-ordered through the holidays and as Apple fulfills demand, it should help suppliers. Moreover, the iPhone looks poised for a strong 2021 overall, and we project that Apple’s iPhone revenues will rise by about 15% this year, after posting a small decline in FY’20. Moreover, the broader consumer electronics market should see demand hold up post-Covid, helping suppliers. That said, one key concern for many players will be the current semiconductor fabrication shortages, which could impact supply levels and margins.
See our dashboard on Apple Component Supplier Stocks for a detailed look at the companies in our theme and how they have fared in recent years.
[12/28/2020] How Are Apple Suppliers Faring
The stock prices of Apple suppliers have fared well since the launch of the 5G iPhone 12 in mid-October. The new handsets have seen robust demand with multiple models remaining out of stock globally. This is a positive development for Apple’s suppliers, considering that the 5G devices are apparently more expensive to produce with more advanced semiconductors and components. Our indicative theme on Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones and other Apple devices – is up by about 20% over the last two months on an equally weighted basis, compared to the S&P 500 which was up by about 12% over the same period. Jabil Circuit – a company that makes encasements for iPhones – has been the strongest performer in recent weeks, with its stock rising by about 35% since late October, driven by an earnings beat and higher Revenue guidance for the fiscal year. Qorvo – a semiconductor player that supplies RF solutions – has also done well, rising by over 30% since late October.
[Updated 11/5/2020] Apple Suppliers Poised To Gain Big From iPhone 12
The iPhone 12 lineup is likely to drive a big upgrade cycle for Apple, considering the 5G radios, new screen size options, and refreshed industrial design. While Apple stock – which is up about 55% this year – looks slightly overvalued in our view, Apple suppliers could see more upside from the new devices. Shipments of the new iPhones are likely to be higher compared to last year and components could also be pricier considering the increased costs associated with 5G. There is already some evidence that suppliers are benefiting from the new devices. Earlier this week, Apple’s 5G modem supplier Qualcomm published a strong set of Q4 results, driven in part by 5G chips used in the new iPhone, while Skyworks
SWKS
– a supplier of radio frequency components – also posted strong quarterly numbers. Our indicative theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for iPhones and other Apple devices – is up by about 16% year-to-date, on an equally weighted basis, compared to the S&P 500 which has gained about 7%. Qualcomm, up 46% year-to-date, is a major driver of the theme’s return this year. On the other hand, Jabil Circuit was the worst performer, down roughly -17% this year. Below is a bit more about these companies.
Qualcomm sells application processors, modems, and licenses wireless technology to key handset manufacturers. The company is seen as a leader in 5G technology and could be a big beneficiary as the broader smartphone market transitions to the new technology over the next few years. The stock is up by about 46% year-to-date.
QRVO
, is a semiconductor player that supplies RF solutions focused on cellular, Ultra-wideband, and Wi-Fi to manufacturers of mobile products such as smartphones, wearables, and tablets. The stock is up by about 15% year-to-date.
QRVO
Skyworks Solutions, manufactures semiconductors for use in radio frequency systems and components such as switches and amplifiers. It’s likely that more complex requirements for 5G iPhones will drive demand for the company. The stock has rallied 15% this year.
Jabil Circuit, is a manufacturing firm that makes encasements for Apple’s iPhones and iPad. Jabil
JBL
stock is down -17% this year, as the Coronavirus impacted the company’s electronic manufacturing services business.
GLW
produces specialty glass, ceramics, and related materials. The company has been the key supplier of the glass used on iPhones, including the tougher “Ceramic Shield” glass used on the iPhone 12. The stock is up 15% this year.
SAN FRANCISCO (AP) — Artificial intelligence‘s recent rise to the forefront of business has left most office workers wondering how often they should use the technology and whether a computer will eventually replace them.
Those were among the highlights of a recent study conducted by the workplace communications platform Slack. After conducting in-depth interviews with 5,000 desktop workers, Slack concluded there are five types of AI personalities in the workplace: “The Maximalist” who regularly uses AI on their jobs; “The Underground” who covertly uses AI; “The Rebel,” who abhors AI; “The Superfan” who is excited about AI but still hasn’t used it; and “The Observer” who is taking a wait-and-see approach.
Only 50% of the respondents fell under the Maximalist or Underground categories, posing a challenge for businesses that want their workers to embrace AI technology. The Associated Press recently discussed the excitement and tension surrounding AI at work with Christina Janzer, Slack’s senior vice president of research and analytics.
Q: What do you make about the wide range of perceptions about AI at work?
A: It shows people are experiencing AI in very different ways, so they have very different emotions about it. Understanding those emotions will help understand what is going to drive usage of AI. If people are feeling guilty or nervous about it, they are not going to use it. So we have to understand where people are, then point them toward learning to value this new technology.
Q: The Maximalist and The Underground both seem to be early adopters of AI at work, but what is different about their attitudes?
A: Maximalists are all in on AI. They are getting value out of it, they are excited about it, and they are actively sharing that they are using it, which is a really big driver for usage among others.
The Underground is the one that is really interesting to me because they are using it, but they are hiding it. There are different reasons for that. They are worried they are going to be seen as incompetent. They are worried that AI is going to be seen as cheating. And so with them, we have an opportunity to provide clear guidelines to help them know that AI usage is celebrated and encouraged. But right now they don’t have guidelines from their companies and they don’t feel particularly encouraged to use it.
Overall, there is more excitement about AI than not, so I think that’s great We just need to figure out how to harness that.
Q: What about the 19% of workers who fell under the Rebel description in Slack’s study?
A: Rebels tend to be women, which is really interesting. Three out of five rebels are women, which I obviously don’t like to see. Also, rebels tend to be older. At a high level, men are adopting the technology at higher rates than women.
Q: Why do you think more women than men are resisting AI?
A: Women are more likely to see AI as a threat, more likely to worry that AI is going to take over their jobs. To me, that points to women not feeling as trusted in the workplace as men do. If you feel trusted by your manager, you are more likely to experiment with AI. Women are reluctant to adopt a technology that might be seen as a replacement for them whereas men may have more confidence that isn’t going to happen because they feel more trusted.
Q: What are some of the things employers should be doing if they want their workers to embrace AI on the job?
A: We are seeing three out of five desk workers don’t even have clear guidelines with AI, because their companies just aren’t telling them anything, so that’s a huge opportunity.
Another opportunity to encourage AI usage in the open. If we can create a culture where it’s celebrated, where people can see the way people are using it, then they can know that it’s accepted and celebrated. Then they can be inspired.
The third thing is we have to create a culture of experimentation where people feel comfortable trying it out, testing it, getting comfortable with it because a lot of people just don’t know where to start. The reality is you can start small, you don’t have to completely change your job. Having AI write an email or summarize content is a great place to start so you can start to understand what this technology can do.
Q: Do you think the fears about people losing their jobs because of AI are warranted?
A: People with AI are going to replace people without AI.
WASHINGTON (AP) — The Biden administration said Tuesday that it would provide up to $325 million to Hemlock Semiconductor for a new factory, a move that could help give Democrats a political edge in the swing state of Michigan ahead of election day.
The funding would support 180 manufacturing jobs in Saginaw County, where Republicans and Democrats were neck-in-neck for the past two presidential elections. There would also be construction jobs tied to the factory that would produce hyper-pure polysilicon, a building block for electronics and solar panels, among other technologies.
Commerce Secretary Gina Raimondo said on a call with reporters that the funding came from the CHIPS and Science Act, which President Joe Biden signed into law in 2022. It’s part of a broader industrial strategy that the campaign of Vice President Kamala Harris, the Democratic nominee, supports, while Republican nominee Donald Trump, the former president, sees tariff hikes and income tax cuts as better to support manufacturing.
“What we’ve been able to do with the CHIPS Act is not just build a few new factories, but fundamentally revitalize the semiconductor ecosystem in our country with American workers,” Raimondo said. “All of this is because of the vision of the Biden-Harris administration.”
A senior administration official said the timing of the announcement reflected the negotiating process for reaching terms on the grant, rather than any political considerations. The official insisted on anonymity to discuss the process.
After site work, Hemlock Semiconductor plans to begin construction in 2026 and then start production in 2028, the official said.
Running in 2016, Trump narrowly won Saginaw County and Michigan as a whole. But in 2020 against Biden, both Saginaw County and Michigan flipped to the Democrats.
Although no one likes a know-it-all, they dominate the Internet.
The Internet began as a vast repository of information. It quickly became a breeding ground for self-proclaimed experts seeking what most people desire: recognition and money.
Today, anyone with an Internet connection and some typing skills can position themselves, regardless of their education or experience, as a subject matter expert (SME). From relationship advice, career coaching, and health and nutrition tips to citizen journalists practicing pseudo-journalism, the Internet is awash with individuals—Internet talking heads—sharing their “insights,” which are, in large part, essentially educated guesses without the education or experience.
The Internet has become a 24/7/365 sitcom where armchair experts think they’re the star.
Not long ago, years, sometimes decades, of dedicated work and acquiring education in one’s field was once required to be recognized as an expert. The knowledge and opinions of doctors, scientists, historians, et al. were respected due to their education and experience. Today, a social media account and a knack for hyperbole are all it takes to present oneself as an “expert” to achieve Internet fame that can be monetized.
On the Internet, nearly every piece of content is self-serving in some way.
The line between actual expertise and self-professed knowledge has become blurry as an out-of-focus selfie. Inadvertently, social media platforms have created an informal degree program where likes and shares are equivalent to degrees. After reading selective articles, they’ve found via and watching some TikTok videos, a person can post a video claiming they’re an herbal medicine expert. Their new “knowledge,” which their followers will absorb, claims that Panda dung tea—one of the most expensive teas in the world and isn’t what its name implies—cures everything from hypertension to existential crisis. Meanwhile, registered dietitians are shaking their heads, wondering how to compete against all the misinformation their clients are exposed to.
More disturbing are individuals obsessed with evangelizing their beliefs or conspiracy theories. These people write in-depth blog posts, such as Elvis Is Alive and the Moon Landings Were Staged, with links to obscure YouTube videos, websites, social media accounts, and blogs. Regardless of your beliefs, someone or a group on the Internet shares them, thus confirming your beliefs.
Misinformation is the Internet’s currency used to get likes, shares, and engagement; thus, it often spreads like a cosmic joke. Consider the prevalence of clickbait headlines:
You Won’t Believe What Taylor Swift Says About Climate Change!
This Bedtime Drink Melts Belly Fat While You Sleep!
In One Week, I Turned $10 Into $1 Million!
Titles that make outrageous claims are how the content creator gets reads and views, which generates revenue via affiliate marketing, product placement, and pay-per-click (PPC) ads. Clickbait headlines are how you end up watching a TikTok video by a purported nutrition expert adamantly asserting you can lose belly fat while you sleep by drinking, for 14 consecutive days, a concoction of raw eggs, cinnamon, and apple cider vinegar 15 minutes before going to bed.
Our constant search for answers that’ll explain our convoluted world and our desire for shortcuts to success is how Internet talking heads achieve influencer status. Because we tend to seek low-hanging fruits, we listen to those with little experience or knowledge of the topics they discuss yet are astute enough to know what most people want to hear.
There’s a trend, more disturbing than spreading misinformation, that needs to be called out: individuals who’ve never achieved significant wealth or traded stocks giving how-to-make-easy-money advice, the appeal of which is undeniable. Several people I know have lost substantial money by following the “advice” of Internet talking heads.
Anyone on social media claiming to have a foolproof money-making strategy is lying. They wouldn’t be peddling their money-making strategy if they could make easy money.
Successful people tend to be secretive.
Social media companies design their respective algorithms to serve their advertisers—their source of revenue—interest; hence, content from Internet talking heads appears most prominent in your feeds. When a video of a self-professed expert goes viral, likely because it pressed an emotional button, the more people see it, the more engagement it receives, such as likes, shares and comments, creating a cycle akin to a tornado.
Imagine scrolling through your TikTok feed and stumbling upon a “scientist” who claims they can predict the weather using only aluminum foil, copper wire, sea salt and baking soda. You chuckle, but you notice his video got over 7,000 likes, has been shared over 600 times and received over 400 comments. You think to yourself, “Maybe this guy is onto something.” What started as a quest to achieve Internet fame evolved into an Internet-wide belief that weather forecasting can be as easy as DIY crafts.
Since anyone can call themselves “an expert,” you must cultivate critical thinking skills to distinguish genuine expertise from self-professed experts’ self-promoting nonsense. While the absurdity of the Internet can be entertaining, misinformation has serious consequences. The next time you read a headline that sounds too good to be true, it’s probably an Internet talking head making an educated guess; without the education seeking Internet fame, they can monetize.
