Trade Alert

Trade Update: Sold Apple, Bought Amazon

_{Posted by Club Member Bonds 12.9.23}

Decided to swap out Apple for Amazon for the long/short mega cap tech trade.

I think the relaunch of Huawei smartphones in China could hurt Apple’s iPhones sales in China.

Following US sanctions against Huawei, its market share for smartphone sales dropped from 27% in 2020 to around 11% today, conversely, Apple being the only premium smartphone brand left in China, saw its market share grew from 11% to 19% over the same period.

While Apple may still be the superior product, one has to assume that Huawei’s re-entry into the premium smartphone market will be competitive, and will weigh on iPhone sales growth in China as Huawei tries to reclaim some of its lost market share.

Apple’s stock already trades at a premium multiple for a company that is experiencing slowing topline and bottom-line growth. Coupled with the recent ban of government officials from using iPhones for work purposes, these headlines will likely rattle investor confidence over the near term.

The whole point of owning a basket of mega cap tech stocks in this L/S pair trade, is so that I wouldn’t need to worry too much about “company specific events or risks” (i.e., the basket on average has an upward bias), so I was initially reluctant to make this swap, especially since my personal track record for timing tactical trades like these has not been great lately. Longer term, there’s still a lot to like about Apple, but…continue reading

#Trade Update #Apple #Amazon #Mega Cap Tech

View Comments - Join the discussion for this trade!  

For more trade ideas visit the Daily Market Exchange.

Subscribe to receive more Trade Alerts.

About Us

The Daily Market Exchange is a global investment network.

It is a forum for elite market participants to exchange investment ideas and market views.

It is a platform for investors to collaborate and a hub for traders to share strategies.

Stock selection is hard, market timing harder so. Why do it alone?

Our members benefit from the network’s collective market insight and experience.

Have a stock idea, but not confident with your research to pull the trigger? Join our network and discuss your investment thesis with other members. Benefit from their sector experience and perspectives!

Struggling to find new investment ideas for your portfolio? Join our network and tap into our members’ latest ideas and research!