• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Chart of the Day: Winners and Losers Amid Apple's Slide

Apple has fallen back to Earth in recent months and made an impact on a number of companies in doing so.
By KEVIN CURRAN Jan 03, 2019 | 04:41 PM EST
Stocks quotes in this article: SSNLF, BRK.B, BRK.A, AAPL, QCOM, KHC, AVGO, SWKS, DLGNF, AMSSY, QRVO, TSM, NVDA, SBUX, LITE

Apple Inc.'s (AAPL) steep slide into the New Year is having far-reaching effects on the broader market, as one would expect from one of the most widely held stocks in the world.

To put the company's long-term slide into context, it has essentially lost one Berkshire Hathaway (BRK.A) (BRK.B) off it its market cap since its peak in the fall.

Refer to the chart below for the size of Apple's market cap cut since its peak against the market cap of some of America's largest companies.

 

However, the effect has not been even across industries or stocks. As such, separating the winners from the losers will be key to identify even for those avoiding Apple altogether.

WINNERS

Huawei

One obvious winner given Tim Cook's lamentation of Apple's performance in China would be its chief Chinese competitor: Huawei.

"Top of the list for me would be Huawei," D.A. Davidson analyst Tom Forte told Real Money. "The Chinese consumers are voting with their wallets and that will move to Huawei."

He added that the patriotic sentiment of consumers in China that is motivating them to avoid the higher prices of comparable Apple products.

The confluence of betting with your nation and your wallet is a hard combination to beat for Huawei.

5/ Another reason: the rise of HOV (Huawei OPPO & vivo) in China.

Huawei's performance has been phenomenal in China. Mate Series is a serious alternative to premium iPhones & a de-facto business phone, especially among males.

Look at this @Huawei vs @Apple fight in China: pic.twitter.com/ETDpnrxnvF

— Neil Shah (@neiltwitz) January 3, 2019

Samsung

Samsung (SSNLF) could be a secondary beneficiary of the trade battle that is impacting Apple.

As far as phones, the South Korean smartphone and semiconductor company could benefit from its lower price point on phones.

However, the company is barely exposed to the Chinese market, with less than 1% of its overall mobile phone sales coming from China, according to Daniel Yoo, head of global strategy and research at South Korea-based Kiwoom Securities.

Instead, the impact of the trade war that Apple cited as a primary problem pushing sales numbers downward actually plays to Samsung's advantage in terms of its semiconductor production.

Samsung does generate about 15.5% of its overall revenue from mainland China according to FactSet, largely from its semiconductor segment.

If the pressure on the Chinese economy is as big as Apple and its suppliers suggest, Samsung's dominance in East Asian markets could persist as China's "Made in China 2025" plan stalls.

Qualcomm

Score one for playing tough.

The former Apple supplier and more recent legal foe was quite pleased to kick Apple in the ribs with the enforcement of an iPhone sales ban in Germany, just weeks after a ruling in China added to issues for Apple in the East Asian market.

To be sure, Qualcomm (QCOM) shares also declined on Thursday, but this is likely a consequence of pressure on the overall semiconductor sector than anything else.

Essentially, the more pressure on Apple, the more likely a desirable resolution for Qualcomm can be reached. Right now, the heat is on high.

LOSERS

Warren Buffett

Between Kraft Heinz (KHC) and Apple, Warren Buffett has been a perfect exemplar of just how difficult stock picking is in a market like this.

Berkshire Hathaway's roughly 5.3% stake in the Tim Cook's tech giant has lost nearly $4 billion on Thursday, based on Berkshire's reported holdings as of Sept. 30. Berkshire owns about 252 million shares of Apple, which was worth about $39.8 billion prior to Apple's revenue warning on late Wednesday afternoon.

Shares of his company are feeling the blow, sagging over 5.6% in their own right on Thursday.

Semiconductor Sector/Apple Suppliers

The pain that Buffett is being dealt is mild in comparison to the havoc that Apple's forecast is wreaking on the semiconductor sector and its suppliers more specifically.

Apple chip suppliers like Skyworks Solutions (SWKS) , Advanced Micro Devices AMD, Qorvo (QRVO) , Broadcomm (AVGO) , Lumentum (LITE) , and Taiwan Semiconductor Manufacturing (TSM) were among some of the deepest decliners in the market.

European equipment suppliers Dialog Semiconductor Plc (DLGNF) and AMS AG (AMSSY) were hit even harder, declining by 12.4% and 23.6% respectively on Thursday.

However, the impact was further reaching and worked to drag down a number of semiconductor indices and impacted even semiconductor companies without exposure to Apple.

Nvidia (NVDA) , for example, despite virtually no relationship with Apple, declined nearly 6% on the day.

Companies with High Exposure to China

The fear over patriotic reprisals from Chinese consumers amid the ongoing trade war is spreading as well, as a company like Starbucks (SBUX) is sliding significantly based on its own tussle with domestic Chinese challenges.

Luckin is leveraging a discounting model amid an economic slowdown as well as its identity as a Chinese run company to compete with Starbucks.

According to WeChat, a Chinese social media site, Luckin is a serial discounter and often undercuts Starbucks' comparatively expensive business model.

The site states that two-for-three and five-for-ten coffee deals are standard and at least through 2018, all food is half price. The heavy discounting is made possible by the company founder Jenny Qian Zhiya's deep pockets from her UCAR ride hailing business.

The combination of factors is a toxic brew for the stock and is helping push shares down nearly 5% on Thursday as China comes into focus.

Wall Street Estimates

Estimates may have been reined in significantly on the day as news of the forecast issues rolled in, but they appear too little, too late for many onlookers.

For reference, as Apple hit its initial decline, analysts nearly across the board pounded the table to buy more shares and not one sell rating was issued, save for that of Pierre Ferragu at New Street Research.

Headed into Apple's fourth quarter fall, the FactSet consensus followed along with the stock's trend quite closely, marking no more than $20 north of the stock price into October.

By November, the consensus was $60 per share above the share price, consistently coming apart from the trend in the stock.

Many analysts following the stock will need to regain market confidence with their revised estimates.

The Market

As one of the most widely held stocks in the world, it should come as little surprise that the market overall is taking a hit.

A 10% drop in Apple shares have dropped on the market's head and promoted a 660 point slide in the Dow.

In the end, an inauspicious start to the year for Apple, has marked an inauspicious start for many to 2019.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

Jim Cramer and the AAP team hold a position in Apple for their Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AAPL? Learn more now.

TAGS: Investing | Stocks | Semiconductors & Semiconductor Equipment | Software & Services | Technology | Technology Hardware & Equipment | China | Europe | United States | Emerging Markets (South America, Asia, Middle East) | Analyst Actions | U.S. Equity

More from Stocks

When Not Just Any Dividend Stock Will Do

Bob Ciura
May 28, 2022 12:30 PM EDT

These 3 high-yield stocks are also attractive on a total return basis.

Buying Will Get You Nowhere If You Don't Know How to Sell

James "Rev Shark" DePorre
May 28, 2022 10:00 AM EDT

Let's explore the tremendous power of the sell button -- and why it's so emotionally charged.

Move Over Target and Walmart, Costco Gets the Gold Star

Stephen Guilfoyle
May 28, 2022 7:30 AM EDT

I had a bit of money -- and ego -- riding on Costco coming into earnings. It didn't disappoint.

A Rally Driven by Fear (of Missing Out)

James "Rev Shark" DePorre
May 27, 2022 4:28 PM EDT

What's next after this seesaw week? One thing is for sure: More volatility.

Let's Take Nikola for a Spin. And Then Return It

Mark Sebastian
May 27, 2022 2:56 PM EDT

I wouldn't want to own NKLA, but I could see riding it for a few days.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:58 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The tremendous power of the sell button.
  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login