Friday File: China, Data Center and 5G Shakeup… plus a couple boring buys

Checking in on a bunch of Real Money Portfolio newsmakers... including MGM, NFDA, COR, PINC, IQ and many more... plus two new names on the watchlist


So… anything happen this week? 🙂

We’ll start with a few headline-grabbers from the Real Money Portfolio in the technology world, slide into a little teaser solution for you, and then share some updates on a couple small buys I made, plus some additions to the watchlist, along with the usual blather…

Xilinx (XLNX) had its analyst day — which brought no big changes, the guidance stayed about even with analyst expectations for the year. That wasn’t really enough to change expectations, but pessimism about trade war craziness and, in particular, President Trump’s renewed push to officially block imports from or exports to some Chinese companies, particularly Huawei and ZTE, which many folks see as at last partially related to negotiating tactics in the “trade war” with China, hurt the tech supplier stocks who depend on Chinese markets or sell a lot to those firms and are thus likely to see their revenue hit and/or become prime retaliation targets… including, among many others, Xilinx, Skyworks (SWNS) and Qualcomm (QCOM).

This executive order is expected to prohibit the import of equipment from Huawei and ZTE, which will have an impact and might even help some parts of the 5G infrastructure world, like Nokia (NOK) and Ericsson (ERIC), but that’s not really unexpected or a “new” impact, Huawei and ZTE have effectively been barred from a major presence in the US for a while now… the newer “crisis” is that Huawei will now reportedly be prohibited from buying US-made components for its smartphones and other devices, and, despite the image we have of the US as being just an idea factory, with everything “Made in China,” the US is still a major producer of some advanced chips and other components that Huawei buys… including processors and modems from Qualcomm, memory from Micron (MU), etc.

We don’t really know how it’s going to shake out, but Huawei has been stockpiling some components so it’s not likely to be a surprise to any of the market participants… it sounds like being added to this restricted “Entity List” means that US companies will need to get a license from the government to sell or transfer their technology to Huawei (or anyone else on that list) — which, in the current environment, probably means a full ban, since it’s hard to imagine such licenses being granted.

I have no idea how this will ...

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