Nasdaq Today: M&A Fuels Stocks; Streaming Wars to Heat Up

AT&T's WarnerMedia introduced HBO Max and Apple caught a price target hike

It’s interesting to see so much reluctance in the stock market when the indices are at or near all-time highs. It’s far from overly bullish, and I would even argue that it’s quite cautious out there. That said, we did see a lower open that got bid higher in the Nasdaq today, with the index closing higher by 0.54%.

Nasdaq Today: M&A Fuels Stocks; Streaming Wars to Heat Up
Source: Shutterstock

That easily outpaced both the S&P 500 and Dow Jones, which finished about flat on the day.

Helping lead the charge higher? FAANG! A few weeks ago we said this group would need to perform well if the Nasdaq wanted to get back to new all-time highs. Well, Amazon (NASDAQ:AMZN) hit its highest level since October, while Facebook (NASDAQ:FB) jumped to its highest mark in almost a year. (Here are the trade setups).

Netflix (NASDAQ:NFLX) tacked on 1%, while Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) jumped 67 basis points.

That action is notable, as the Nasdaq was sitting on the key 8,100 level on Monday’s close. Now above it, investors are thinking about new highs. Of course, the Federal Reserve is stealing the focus with Wednesday’s announcement looming large. (Here’s why it’s important for tech).

M&A Remains Hot


Click to Enlarge
We didn’t get any notable “Merger Monday” news, but Tuesday didn’t disappoint. Cisco Systems (NASDAQ:CSCO) nabbed Acacia Communications (NASDAQ:ACIA) for $2.6 billion. The move sent the latter up by 35%, while Cisco eked out a gain too. I guess the market liked the move, since both stocks rallied.

The optics space liked the news too. Applied Optoelectronics (NASDAQ:AAOI), Inphi Corp (NYSE:IPHI) and NeoPhotonics (NYSE:NPTN) went ripping higher. Even Cisco competitor Arista Networks (NASDAQ:ANET) caught a bid on the day.

Heard in the Nasdaq Today

A day after a bearish downgrade hit Apple (NASDAQ:AAPL), JPMorgan analysts were out defending the stock. They raised their price target to $239 from $233 — implying ~19% upside — on iPhone optimism.

While Chewy (NYSE:CHWY) doesn’t trade on the Nasdaq, the e-commerce company is considered a tech/digital play by many. The stock’s quiet period lifted, allowing analysts to assign their ratings and price targets for Chewy. The highest target came in at $42 from two firms, JPMorgan and UBS. The lowest came from Barclays at $32 per share.

Of the nine analysts covering the stock, CHWY received four buy-equivalent ratings and five hold-equivalent ratings. The average price target came out around $37.50 and notably, there were no sell ratings. Still, the stock fell 3.2% on the day.

Streaming Wars Will Heat Up

If you’re a Netflix investor, do you worry about the coming slate of streaming platforms? NFLX has become such a staple in the streaming business, it’s hard to imagine that it will ever be displaced. In fact, it seems more likely that with more streaming options, consumers may cut the cord more easily, with NFLX being a staple in most bundles.

Anyway, AT&T’s (NYSE:T) WarnerMedia announced the company’s new streaming product, HBO Max. It’s where the company’s Friends show will air in 2020, as well as the Fresh Prince of Bel-Air, past HBO content and more than a dozen original shows and movies.

Remember, NFLX reportedly paid $100 million to keep Friends on its platform for this year. It’s currently the platform’s No. 2 show, behind The Office, which is also leaving NFLX in 2020 for NBC’s streaming option.

There are so many coming platforms it’s hard to keep track. There’s Hulu, which is now basically owned by Disney (NYSE:DIS), not to mention Disney’s ESPN+ and Disney+ platforms. NFLX, YouTubeTV, Prime Video, apparently NBC and others are all headed consumers’ way too.

The HBO one is a bit perplexing. Why launch a separate HBO Max, which is different than HBO Now and HBO Go? It seems like Warner could have revamped HBO Now with this new content, then raised prices. It keeps things seamless rather than forcing consumers to sign up for one more thing or go through the trouble of switching.

I’m not a streaming executive, but at some point, do we have too many options?

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL, DIS, ANET, AMZN and GOOGL.


Article printed from InvestorPlace Media, https://investorplace.com/2019/07/nasdaq-today-m-streaming-wars-to-heat-up/.

©2019 InvestorPlace Media, LLC