WeChat restriction could harm Apple
On Aug. 6, Trump issued an executive order that will efficiently ban WeChat, owned by Chinese company Tencent, in the United States in 45 days. While the exact information will not be identified up until the 45-day duration lapses, the worst-case situation is bad news for Apple.
Expert Ming-Chi Kuo estimates Apples annual global iPhone shipments could plunge by as much as 30% if the company is required to remove the WeChat app from its App Stores in all countries. Kuo forecasts a modest 3% to 6% decline in iPhone sales if the executive order requires Apple to eliminate the app just in the United States. WeChat is by far the most popular messaging app in China, with a monthly user base topping 1 billion.
Wedbush raised its cost target on Apple stock from $475 to $515 on Monday, driven by increased optimism for the businesss upcoming iPhones. Under the best-case circumstance, Wedbush sees Apple stock increasing to $600.
Like Apple, Microsoft stock trades close to its all-time high. And like Apple, it wont take much bad news to put pressure on the stock.
If the executive order requires Apple to eliminate the app only in the United States, Kuo predicts a modest 3% to 6% decline in iPhone sales. Wedbush raised its price target on Apple stock from $475 to $515 on Monday, driven by increased optimism for the companys upcoming iPhones. Under the best-case situation, Wedbush sees Apple stock increasing to $600.
Apple is facing a great deal of uncertainty. The company will be launching brand-new iPhones later this year into an extremely weak economy, and the WeChat restriction has the prospective to thwart its organization in China. In spite of this, the stock is trading right around its all-time high. It will not take much bad news to send out the stock toppling.
Long chances for Microsoft deal for TikTok
Chinese social networks app TikTok will likewise be efficiently prohibited in the United States in 45 days, via a different executive order. Microsoft has remained in speak with obtain the U.S. operations of the app, which would potentially resolve the U.S. governments data security issues. An offer is looking less most likely.
South China Morning Post is reporting that TikToks Chinese owner ByteDance is preparing to escalate its legal battle versus the U.S. It also mentioned a source that said that the likelihood of Microsoft buying TikTok is at most 20%. The chances of Twitter, another possible suitor, buying the company are even lower due to Twitters absence of resources.
It might be for the best that an offer is unlikely to happen. Microsoft would likely require to shell out tens of billions of dollars for the app, and it would expose itself to regulative scrutiny and the trade war between the U.S. and China. Microsoft co-founder Bill Gates called the deal “a poisoned chalice” in an interview with Wired, mentioning the drawbacks of Microsoft becoming a huge player in social networks.
Image source: Getty Images.
Microsoft stock was down 2.1% by Monday afternoon, although its uncertain whether the TikTok deal was the driving force. Like Apple, Microsoft stock trades near to its all-time high. And like Apple, it wont take much problem to put pressure on the stock.
The Dow Jones Industrial Average (DJINDICES: ^ DJI) was putting the other significant stock indexes to embarassment Monday afternoon, up about 1% by 1:45 p.m. EDT. Theres a lot going on: A new stimulus expense continues to be held up in Congress, executive orders from President Donald Trump escalated stress with China, and COVID-19 day-to-day cases remain elevated in the U.S. but are trending lower.
Apple (NASDAQ: AAPL) stock contributed to the Dows gain on Monday thanks to an analyst cost target bump, and despite a dire price quote from a separate expert for how bad things might get for the company if the executive order targeting Chinas WeChat is required to an extreme. On The Other Hand, Microsoft (NASDAQ: MSFT) stock headed lower as its deal for Chinese social media app TikTok looks increasingly not likely.
