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Tech Stocks This Week: Shopify Hits New Highs, Buffett Buys More Apple, and More

By Daniel Sparks - Feb 17, 2018 at 11:45AM

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The S&P 500 enjoyed a 4% gain this week. But all of these stocks more than doubled this increase.

Following a down week for the S&P 500, market indices roared back this week. But some stocks -- Shopify (SHOP 3.52%), Apple (AAPL 2.54%), and Cisco Systems (CSCO 3.26%), in particular -- handily outperformed the S&P 500's strong 4.3% gain.

Here's a look at what helped propel these three stocks higher than the market indices this week.

SHOP Price Chart

SHOP Price data by YCharts.

Shopify tests new highs

Most of Shopify's gain during the week came in the days leading up to its fourth-quarter earnings release on Feb. 15. The company habitually reported better-than-expected results throughout 2017, so investors may have been hoping the company would pull off this feat again.

Shopify did pull off expectation-crushing results, reporting non-GAAP earnings per share (EPS) of $0.15. This compared to non-GAAP earnings per share of $0.00 in the year-ago quarter. On average, analysts were expecting adjusted earnings per share of $0.05. 

Shopify's revenue for the quarter was $222.8 million, up 71% year over year. This was driven by a 67% increase in subscription-solutions revenue and a 74% rise in merchant-solutions revenue.

Looking ahead, Shopify CFO Russ Jones was optimistic: "Our leadership role in commerce, together with the scale we have achieved, position us well to invest in our next phase of growth: one marked by expansion of our capabilities upmarket and down, in retail, in our ecosystem, and internationally."

The stock finished the week up 15%.

Buffett's Berkshire loads up on more Apple

Apple stock's boost during the week was helped by news that famed investor Warren Buffett's Berkshire Hathaway (BRK.B -0.51%) (BRK.A 1.60%) added tens of millions of Apple shares to his already enormous position in the stock.

Apple customers holding new iPhone X devices on launch day

Apple customers holding iPhone X devices. Image source: Apple.

At 165.3 million shares, Berkshire's investment is now worth close to $30 billion, making Apple Berkshire's largest equity holding. Buffett's Berkshire has been buying Apple stock since early 2016, but this latest purchase marked a significant acceleration in the rate Berkshire was buying shares. Berkshire bought 31.2 million shares in Q4, up from the 3.9 million shares it bought in the previous quarter.

Apple stock gained 10% during the week.

Cisco stock jumps after earnings

Networking-hardware provider Cisco surprised investors with a strong return to growth in its second quarter of fiscal 2018. Revenue and non-GAAP EPS increased 2.7% and 10.5%, respectively.

Highlighting the company's progress in transforming its business so that it's less reliant on its legacy routing-and-switching business, recurring revenue accounted for 33% of revenue, up from 31% of revenue in the year-ago quarter.

Cisco also increased its quarterly dividend by 14% and announced a $25 billion stock-repurchase authorization. This raised Cisco's total repurchase authorization to $31 billion.

"We expect to utilize this over the next 18 to 24 months," said Cisco CFO Kelly Kramer during the company's earnings call. "This significant dividend increase and additional share repurchase authorization reinforces our commitment to returning capital to our shareholders and our confidence in the strength and stability of our ongoing cash flows."

Cisco stock finished the week up about 12%.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$149.24 (2.54%) $3.70
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
$50.60 (3.26%) $1.60
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$471,670.00 (1.60%) $7,420.00
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$313.00 (-0.51%) $-1.60
Shopify Inc. Stock Quote
Shopify Inc.
$372.64 (3.52%) $12.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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