Original title: Apple's share price rose 84% this year, pushing us technology stocks to a 10-year high
According to foreign media reports, since the recovery of the financial crisis, the performance of technology stocks in 2019, which is about to end, should be the best year.
As December draws to a close, the 70 member s & P 500 information technology (it) index is up 48% in 2019, its best year since it jumped 60% in 2009.
The difference a decade ago was that the technology index was falling back from 2008, when it plummeted by 44%, creating buying opportunities and paving the way for the so-called 'dead cat rebound'.
This time, technology stocks fell only 1.6% in 2018 and rebounded to new highs in 2019, suggesting that the latest rally was supported by stronger corporate financial conditions in the S & P 500 it index and optimism about the broader economy.
This year, a group of semiconductor manufacturers and chip equipment companies led the index, along with apple.
It should be noted that this index does not include Internet companies. As a result, Fang (Facebook, Amazon, Netflix and Google) shares are not in the index. Even so, of the top four stocks, only Facebook outperformed the S & P 500 it index, while each of the others lagged by at least 18 percentage points.
Jack dollaride, chief executive of Longbow asset management, said: 'this year, Fang's trading has not been ideal, while other technology companies are catching up. A large part of the reason is that consumers are increasingly eager for mobile technology. '
As of Thursday's close, chip maker amd was the biggest gainer in the S & P 500 it index, up 153%. Lam research, a semiconductor equipment maker, rose 117%. KLA, which also supplies the chip industry, rose 100%, while qorvo, a supplier of iPhone RF technology, rose 94%.
In addition, Apple's performance was very strong, ranking eighth in the S & P 500 it index, up 84%. Given its size, the iPhone maker is by far the biggest contributor to the index's rise.
While the smartphone market is getting saturated and people have been worried that the iPhone won't get better or more powerful, apple continues to attract consumers with new features and options. It is reported that Apple will launch more iPhone models next year, some with larger screens and others with smaller screens.
Apple's iPhone sales are expected to fall 9% in October, which means an improvement over previous quarters. In addition, CEO Tim Cook is optimistic about the performance during this year's Christmas shopping season.
In addition to supporting the iPhone with advanced camera technology, longer battery life, and upgraded speakers, Apple has created another fast-growing business: thanks to the popularity of Apple watch and airpods, the wearable device division's sales increased by 50% in the latest quarter over the same period last year.
There is no doubt that all this is good for Apple suppliers like qorvo and AMD. Qorvo relies on apple for about a third of its revenue, while chip maker amd provides graphics processors for some of Apple's iMacs and MacBook Pro. In addition, skyworks shares have risen 82% this year, ranking ninth in the S & P 500 it index, and half of its revenue comes from selling mobile chips to apple and its various OEM manufacturers.
Meguiar, which provides apple with memory technology, was 14th in the index, up 74%.
"It's an apple world, and we're lucky to live in it," dorahid said. '
5g coming
In the chip device market, Lam and KLA are benefiting from trends including apple, but also extending to the explosion of mobile devices more widely. As the world prepares for 5g high-speed networks, manufacturers are developing more networking devices, which means more microprocessors are needed.
To meet this demand, big chip makers such as Intel, Samsung and TSMC are increasing their spending on equipment from top suppliers.
In 2015, Lam and KLA agreed to merge for $10.6 billion, but the plan was cancelled due to antitrust concerns. Now, Lam is on the verge of its best year since 2003, and KLA is enjoying its biggest annual gain since 1999.
Weston Twigg, an analyst at keybanc capital markets, said in a report on Lam last month: 'as computing applications go beyond PCs, mobile phones and tablets, we may enter a period of 10 years or more of semiconductor expansion. 'To this end, Mr. tweeg suggested buying Lam shares. "5g will bring more networking devices," he said. '
In addition to consumer electronics, the S & P 500 it index also benefits from the ongoing cloud computing trend.
Driven by the growth of azure cloud infrastructure and office 365 applications, Microsoft's share price has risen 56% this year, pushing the company's market value to $1.2 trillion, second only to Apple's $1.29 trillion in the United States.
In addition, Adobe and Autodesk, two companies that have transformed from traditional software packages to the cloud in recent years, both rose more than 43%, while servicenow, a cloud IT service provider that just joined the index last month, is up 61%.
What is bearish?
There are ups and downs. DXC technology was the biggest drop in the index, highlighting how difficult it is for some companies to adapt to the wave of cloud computing. Founded two years ago, the company was formed by the merger of HP's Corporate Services Division and computer sciences Corp., and is down 30% this year, after a one-day 30% fall in August. In announcing quarterly earnings, DXC provided disappointing revenue and profit forecasts, reflecting the deterioration of the company's outsourcing operations.
But in any case, only seven of the 70 members of the index are likely to run a deficit this year. In 2020, they will be under increasing pressure to submit a satisfactory financial report, especially for the fastest-growing companies.
According to FactSet, the S & P 500 it index has a market to sales ratio of 5, the highest level since 2000. Apple's price earnings ratio is at an all-time high, while Microsoft's share price is relatively high relative to the average level of the past few years.
Given the uncertainties surrounding global trade, the global economy and the November election, it remains to be seen whether the industry's current upward momentum can withstand all macro headwinds next year.