Apple Suppliers Sink As Tech Titan Surges To Fresh Tecord High
By Todd Gordon
July 14, 2021
Shares of Apple hit a record high this week, but the stocks of several of the company’s suppliers are down on their luck.
Micron, Cirrus Logic, Intel, Qualcomm and Corning have all recently fallen more than 10% from their 52-week highs.
In an interview with CNBC’s “Trading Nation,” Gina Sanchez, founder and CEO of Chantico Global and chief market strategist at Lido Advisors, addressed the ongoing supply chain issues plaguing Apple’s suppliers.
“The suppliers have really had a hard time keeping up with the logistics of providing those supplies to Apple,” she said, adding that the “one that got hit the worst was Intel.”
Although the chipmaker had been dealing with capacity issues, Sanchez bet on the company as a long-term investment. She highlighted the March announcement by Intel CEO Pat Gelsinger that the company would spend $20 billion to build two new chip plants in Arizona.
“Pat Gelsinger is basically saying, ‘Hey, the new Intel is back and we’re investing in it,’” she said.
“It’s trading at 12 times forward earnings compared to an industry average at 23 times.” she added. “It’s a cheap stock right now.”
In the same “Trading Nation” interview, TradingAnalysis.com founder Todd Gordon proposed an alternate take.
“Apple is trying to transition out of Intel,” he said. “Intel’s going to have an increasingly hard time, even in this redesign.”
Apple is even releasing new chips designed by Taiwan Semiconductor to rival Intel’s — the advanced M1 chip released in November and the M2 chip reportedly arriving in the second half of this year, Gordon said.
He also highlighted Taiwan Semiconductor’s use of advanced 5-nanometer semiconductor technology, “which a lot of the other makers are trying to catch up to.”
With the Taiwan-based semiconductor maker behind Apple’s most powerful chips to date, Gordon liked its stock for a potential trade.
Diving into the charts, he highlighted the name’s outperformance relative to Apple.
“From the Covid lows, TSM is up 183% while Apple is only up 140,” he said. “If we could break above 125, I’d look to add to TSM.”
Taiwan Semiconductor shares neared the $125 level in early Wednesday trading, up almost 1%. Apple popped 2% to another record high.
Apple is Gordon’s largest individual holding.
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Founder and Lead Analyst of Trading Analysis
Todd has been trading as a career for the last 20+ years. His goal is to not only provide insightful analysis, but to teach people how to think and grow as professional traders. Todd is a practitioner of Elliott Wave Theory and he uses it to gain an edge in the highly competitive trading arena. In addition to trading professionally, Todd has worked as an analyst and researcher at two different hedge funds. Click Here To Learn More about Todd Gordon