The Apple logo hangs at an Apple Store in Berlin, Germany, on March 25, 2024.
Sean Gallup | Getty Images News | Getty Images
My top 10 things to watch Friday, Jan. 31
1. Apple’s earnings report shows why I always say “own it, don’t trade it.” Where it has launched Apple Intelligence, the iPhone 16 sells better. High-margin services revenues was better. Mac better. Accessories better. Europe better. India better. Expanding gross margins helped make the numbers, too. Shares are up about 4% Friday.
2. China is still a question mark for Apple, though. Revenues down 11% there in the quarter. Apple Intelligence still needs government approval to launch. Rivals Huawei and Xiaomi can access the AI from buzzy Chinese startup DeepSeek. What can Apple get to reverse its fortunes in China? Will Baidu be its AI partner?
3. The U.S. government is looking into whether DeepSeek used third-parties in Singapore to acquire Nvidia chips that Washington has banned in China, according to Bloomberg News. Club name Nvidia says it plays by the rules in Singapore, and that its revenue from the island country does not indicate diversion.
4. We know Tesla, Club stock Meta and Oracle want all the high-end Nvidia chips they can get, even with DeepSeek’s emergence. We don’t know about Club names Alphabet or Amazon, which both report next week. What if one of the two says we are reassessing our orders for Nvidia’s next-gen AI platform Blackwell? What happens to the stock? What if Amazon, another Club holding, says it’s leaning into using AMD? I made a call on Nvidia stock for Club members yesterday.
5. Geopolitics remain part of the Nvidia dilemma. Does DeepSeek have a juicer that can make 10 glasses of orange juice out of a single orange, or does it have 10 government-subsidized juicers that it just won’t tell us about? If it is 10 juicers, I worry that President Donald Trump will just ban all semiconductor exports to China.
6. Trump’s 25% tariffs on imports from Canada and Mexico, currently set to take effect Saturday, may exclude oil, the president told reporters Thursday night. U.S. oil benchmark WTI was slightly higher Friday, to roughly $73 barrel. The U.S. dollar index strengthened, but it’s still below its recent highs set earlier this month.
7. The S&P 500, Nasdaq and Dow Jones Industrial Average were all set to open higher Friday. Stock futures held onto their gains after the Federal Reserve’s preferred inflation gauge matched expectations for December. The PCE index rose 0.3% month over month and, when excluding food and energy, 2.8% on an annual basis.
8. Intel showed some cost discipline and improved cash flow in its quarterly results. But the fourth quarter is typically strong for them, and there might have been some pull-through ahead of higher tariffs on Chinese imports. The PC market is weak. JPMorgan and Wells Fargo cut their price targets on the struggling chip stock. Shares added more than 1% Friday.
9. Atlassian shares jumped almost 20% on the back of a very good quarter. The company, which trades under the ticker TEAM, makes pure enterprise software that makes it easier to share and simplify. Seems unstoppable.
10. Vertex Pharmaceuticals’ non-opioid painkiller Journavx, which blocks pain signals sent to the brain at their origin. This drug could be a blockbuster, and it’s been on my radar for a while now. Vertex shares climbed about 3% Friday.
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