Two Tech Giants Moving in Very Different Directions

Two tech giants are moving in two very different directions as we enter the home stretch for the third quarter.

Apple (AAPL) has appreciated 22 percent since the end of June. That makes it the second-best performer in the SPDR Technology Fund (XLK), with only Advanced Micro Devices (AMD) faring better.

However, Facebook (FB) is the fourth-worst over the same period with an 11 percent drop.

Most readers probably know some of the story. AAPL’s latest results on July 31 revealed gains in stickier service revenue and highlighted the company’s ability to hurl cash back at investors in the form of buybacks. Tim Cook is also charging more for the company’s iconic smart-phones, which is pretty clever.

FB is going in virtually the opposite direction. Where AAPL’s quarter could be described as transformative in a good way, the social-media giant’s numbers devolved into something much less bullish.


Instead of widening, margins are squeezed by new costs. Instead of growing at a rampant pace like in the old days, FB’s traffic is slowing. Where AAPL seems to have a clear path to growing its proven services business, some of FB’s key initiatives haven’t gotten far off the ground yet.

Meanwhile, things might get even harder for Mark Zuckerberg’s company because a new and dangerous predator is loose in the ecosystem: (AMZN). Yep, in case you forgot, Jeff Bezos’ steamroller is moving into the online advertising market.

Suddenly FB has to deal with multiple problems: higher costs, slowing traffic and dangerous killer with a history of devouring its prey. That’s right, America’s No. 4 website is going after No. 3.

The prospects for AAPL, on the other hand, seem to be brightening as the market eagerly awaits the rollout of new iPhones on September 12. Analysts expect three new devices, including some with bigger and better displays. Tech lovers who follow the company closely predict they’ll be called iPhone XS and offer the option of gold cases. A new watch also seems to be in the works.

In conclusion, technology is always about innovation and growth. And right now, the winds seem to be clearly blowing in different directions for two of the sector’s biggest companies.

This article was written by David Russell, TradeStation Securities, Inc., part of the Monex Group Inc, published on 04/09/2018.

Risk Disclaimer: The information above is of general nature only and does not take into account your objectives, financial situation or investment needs. Prior to you make an investment decision, please make sure you carefully read and fully understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other relevant documents that you can obtain from this website. Monex Securities Australia Pty Ltd (AFSL No. 363972; ABN 84 142 210 179) is the Financial services provider. Financial products trading carries risks and may not be suitable for all investors. You are strongly recommended to seek independent financial advice before making any investment decisions.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!