Welcome to Week 14 of the Big Idea Portfolio. Apple (Nasdaq: AAPL ) did most of the heavy lifting this time, with a backsliding market and modest gains from salesforce.com (NYSE: CRM ) contributing the rest of my gains in this contest. Details to come in a minute. First, let's dig into the numbers.
|Google (Nasdaq: GOOG )||$650.09||$632.32||(2.7%)|
|S&P 500 SPDR||$127.15**||$139.79||9.94%|
Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.
Another round of analysts calling for triple-digit price targets lifted Apple shares to new highs, and they're rising again today despite a down market. Contract manufacturer Foxconn is apparently on a massive hiring spree to account for demand for the forthcoming iPhone 5.
But first, on Monday, Topeka Capital Markets analyst Brian White initiated coverage of Apple with a "buy" rating and a $1,001 price target, putting the Mac maker just $70 billion short of becoming the world's first trillion-dollar enterprise. (So much for Google getting there first, eh?)
Interestingly, the report comes on the heels of a Foxconn recruiter telling Japanese television that the company planned to hire 18,000 employees to ramp up production of a new iPhone that he said would "come out in June."
We can't know for sure if the Foxconn report is accurate. And even if it is, June may be too soon to get the iPhone 5 into the hands of retailers and ultimately buyers. An 8% rally in the stock nevertheless suggests that investors buy into Wall Street's bullishness. At the very least, they seem to think White is correct to model for Apple to deliver a 4G LTE iPhone 5 this year, a move that would no doubt further destabilize Research In Motion (Nasdaq: RIMM ) .
Shares of RIM fell more than 12% last week after reporting a $125 million unadjusted net loss the week prior. Revenue fell about 25%. Profits turned south in part because of a non-cash charge to goodwill, while the rest stemmed from accounting for unsold BlackBerry 7 products. Management also announced plans to discontinue its practice of giving specific financial guidance now that it'll be without the services of co-founder Jim Balsillie, who is leaving the company.
Finally, in another nod to the inevitability of cloud computing, Dell (Nasdaq: DELL ) helped fuel a small rally in shares of salesforce.com when it bid an undisclosed sum to purchase Wyse Technology and its suite of thin-client products.
Thin clients may sound like the result of the work of a successful trainer. Not so in tech, where they usually refer to a stripped-down machine that pulls most of its functions from a distant server. In modern PCs, a browser acts as a thin client when it accesses Web-delivered apps such as salesforce.com. Either way, Dell is hoping to tap into the cloud-computing zeitgeist while it still can.
The week that was
Stocks finally stalled and could face an even rougher time in the week ahead. The Dow closed off 0.7% while the S&P 500 fell 0.4%. The tech-heavy Nasdaq Composite index fell 0.5% ahead of the holiday weekend, while the CBOE Volatility Index, or "VIX," widely regarded as the best measure of fear in the market, rose another 7.9% after last week's 4.6% gain. Investors are treading more carefully.
Uncertain employment data appears to be behind the caution. Nonfarm payrolls rose by an unadjusted 120,000 in March according to new federal figures, lowering the national unemployment rate to 8.2%, the lowest since January 2009. Yet if history is any guide -- and in this case, it usually is -- economists will probably revise the report to align more closely with the recent U.S. average of 200,000 jobs per month gained. Does that mean sellers are trimming their stakes unnecessarily? You tell me. Weigh in using the comments box below.
See you back here next week for more tech-stock talk. And remember to check out the Fool's latest special report -- "3 Stocks That Will Help You Retire Rich" -- and add the Big Idea portfolio stocks to your Foolish Watchlist for ongoing, up-to-the-minute coverage. Both the report and the Watchlist are 100% free to use:
- Add Apple to My Watchlist.
- Add Google to My Watchlist.
- Add Rackspace Hosting to My Watchlist.
- Add Riverbed Technology to My Watchlist.
- Add salesforce.com to My Watchlist.