“iPad and Mac sales nearly doubled, showing the strength of the PC market and education channels,” said Shannon Cross, an analyst at Cross Research. “These results also show their control over the supply chain and their ability to outmaneuver competitors.”
But with shares of the world’s larges technology company still expensive, with the stock trading just 8% below its all-time high set in January, investors may want to look at companies that benefit from Apple’s halo effect.
And Miller Tabak’s Matt Maley has one stock in mind that’s part of the Apple ecosystem.
“I really think it’s Qualcomm (NASDAQ: QCOM) here,” Maley, the firm’s chief market strategist, said. “People have been worried in the last few months. [Reports indicated] that Apple may be manufacturing its own chips, and of course Qualcomm is a huge supplier of chips to Apple for their iPhones. However, after the stock has come down a bit, about 30%, it’s kind of worked that off, all that has been priced in.”
Maley added that Qualcomm’s chart is looking constructive as well, with the stock breaking above resistance on Thursday.
“It’s been bouncing along is 200-day moving average so that’s held good support and that’s actually formed a nice what you would call an ascending triangle pattern,” the strategic added, noting that Qualcomm’s positive earnings results from Wednesday should give the stock “another leg higher, a renewed leg of upward movement that I think has been missing for most of this year so I think this one could be a big surprise to the upside.”
New Street Advisors’ Delano Saporu is betting on another stock in the Apple ecosystem. One that is seeing increased podcast demand.
“We saw Spotify (NYSE: SPOT) dropped after reporting earnings, subscription growth wasn’t as strong as expected,” Saporu said. “I think if it keeps dropping then there may be support around the $240 range. It’s going to be a great opportunity for investors to get in.”
Spotify shares closed up 2% at $262.15 on Thursday after dropping nearly 13% on Wednesday after reporting weaker-than-expected monthly active users in its latest quarter and downgrading its full-year guidance.
“Different companies are really vying for top content from top people and you saw what Spotify has done when they aggressively went after President Obama and Joe Rogan to get some of those deals,” Saporu added. “That’s an area where, if they continue to do that and also emerging markets increase listenership and subscriptions that might be an opportunity for Spotify to go higher. I think it’s going to be a continued battle but I’m definitely looking at Spotify closely.”