Billionaire trader Dmitry Balyasny knows how to evolve strategically with a changing market and finds himself drawn to “misunderstood situations” in Wall Street. Having first founded his multi-strategy hedge fund Balyasny Asset Management (BAM) sixteen years ago, Balyasny now manages $2 billion in assets, thanks to a keen, artful eye when it comes to macro investing. Researching to garner stellar returns through clever trading moves, what started as a tiny Chicago office has stepped up its game to well past 90 teams bringing fresh investment ideas to the table. When it comes to the firm’s approach in the second quarter, Balyasny’s compass points in favor of these key three leaders of the technology space: Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA), and Apple Inc. (NASDAQ:AAPL).
Leaning in Towards Advanced Micro Devices
Advanced Micro Devices is flickering with chip-making promise from the eyes of Balyasny, whose hedge fund firm is taking another piece of the pie- to the tune of an added 437,900 shares- taking his stake up to 510,800 shares worth $6,375,000.
Friday indicated the chip giant’s fourth consecutive day of upside in the market, a rise that pursues on back of AMD’s new Ryzen Pro line of CPU chips set loose into the public the day prior. The likes of this momentum have not been seen since July 5th, where the giant experienced another string of four days of trading at increasing levels.
Targeting the high-end of both the professional as well as the business world, AMD boasts that these processors are designed to quickly multitask- which surely is what is drawing the attention of key manufacturing companies including Dell, HP, and Lenovo.
With these leading manufacturers intending to implement the chip giant’s Ryzen Pro processors in their respective computers, AMD is capitalizing on an exciting product launch trajectory that also follows a largely sold-out debut of a Vega line of graphics processing units. Another high-end offensive move points to AMD’s Ryzen Threadripper processors, showing that this is a company ready to battle in the chip maker arena against rival giants Intel and Nvidia.
How does the rest of the Street side on this chip maker? It appears cautiously optimistic, considering TipRanks analytics demonstrate AMD as a Buy. Based on 20 analysts polled by TipRanks in the last 3 months, 9 are bullish on Advanced Micro Devices stock, 8 remain sidelined, and 3 are bearish on the stock. With a return potential of 10%, the stock’s consensus target price stands at $14.54.
Stepping Up Nvidia
Nvidia enticed another confident stride from BAM, as the firm dove in to purchase an extra 174,089 shares in the company, lifting its position to 188,189 shares worth $27,205,000. It looks like a prime second-quarter move, as rumor has it Wal-Mart is prepping to use more of Nvidia’s graphics chips in machine learning.
Global Equities analyst Trip Chowdhry echoes the hedge fund firm’s play of conviction, believing: “This is incrementally positive for NVDA’s GPU Business.”
Four years ago, Nvidia acquired cloud computing network “OneOps,” and as far as Chowdhry assesses the bigger picture, “Within [the] next 6 months or so, Walmart is going full steam with DNN (Deep Neural Networks) and will be creating its own NVDA GPU Clusters on Walmart Cloud,” all of which will only bode positively for the chip giant.
With great enthusiasm, the analyst continues: “Walmart’s NVDA GPU Farm will be about 1/10th the size of AMZN-AWS GPU Cloud, which is huge!! Walmart NVDA GPU Clusters will run Ubuntu Linux and not Red Hat Linux Walmart is working with Anaconda to create custom DNN (Deep Neural Network), and Jupyter Notebook. Walmart will be running a hybrid of CNN (Convolution Neural Network) and RNN (Recurrent Neural Network).”
Ultimately, “investors should not underestimate the Technology acumen of Walmart Software Developers,” asserts Chowdhry, who underscores, “we have seen them present at various conferences, they are as smart as Google or Facebook engineers.”
Staunchly in Nvidia’s corner, the analyst rates a Buy on NVDA stock with an $85 price target, which implies a 50% increase from where the shares last closed. (To watch Chowdhry’s track record, click here)
When looking at Wall Street’s stance, Balyasny is not the only bull, as TipRanks analytics showcase NVDA as a Buy. Out of 25 analysts polled by TipRanks in the last 3 months, 16 rate a Buy on Nvidia stock, 6 maintain a Hold, while 3 issue a Sell on the stock. The 12-month average price target stands at $156.35, marking an 8% downside from where the stock is currently trading.
Boosting Apple Ahead of its Mega iPhone 8 Launch
Balyasny is taking an even bigger bite into Apple, purchasing 1,079,563 shares in a holding now towering at 1,952,433 shares worth $281,189,000. The clock is ticking closer and closer to the tech titan’s buzzed-about iPhone 8 launch, and the Street projects a price tag past $1,000. It would seem Balyasny is going full ante up ahead of the 10th anniversary edition of the iPhone taking the market by storm.
Not everyone on Wall Street is quite so sure about tech consumers being willing to vie for a phone at such a steep price- but Barclays analyst Mark Moskowitz anticipates Apple can surpass this potential challenge by offering one-year subscriptions to favorite services among the public, like Music and iCloud.
“Considering consumers’ sensitivity to the price gap, we explore how Apple could offer purchasers of iPhone 8 a free subscription bundle of 1-year of Apple Music and 1-year of 200GB iCloud storage,” argues Moskowitz.
In fact, the analyst wagers by doing so, the titan hikes its chances of selling more iPhone 8 models, which would subsequently lift Moskowitz’s projection for 2018 from 40 million up to 64 million. Moreover, the analyst anticipates a climb in profit to $1.3 billion should Apple offer these game-changing one-year subscriptions with the costly iPhones. Moskowitz contends, “Such a move could make a $1,000+ iPhone 8 seem more within reach, with the $156 in services serving as a quasi-discount or rebate.”
For now, without these services offered, when Moskowitz gauged customer “buying intention” for the iPhone, there was a noticeable drop from 36% to 18% when the cost surges from $800 to beyond $1,000.
Ahead of the iPhone 8 launch, the analyst casts a careful eye from the sidelines, maintaining an Equal Weight rating on AAPL with a price target of $146, which represents an 11% increase from where the shares last closed. (To watch Moskowitz’s track record, click here)
Is the financial world bullish like Balyasny or veering more towards playing it safe, like Moskowitz? The vote is out and it points towards the bullish, with TipRanks analytics revealing AAPL as a Buy. Based on 34 analysts polled by TipRanks in the last 3 months, 25 are bullish on Apple stock while 9 remain sidelined. With a return potential of nearly 4%, the stock’s consensus target price stands at $170.55.