John Hurley is no stranger to the tech sector, as the founder, managing partner, and chief investment officer of Cavalry Asset Management has a keen eagle eye for investing in public as well as private technology companies. This hedge fund trader knows the ins and outs of course and case development in investment management, wisdom he shares in his lectures in Finance at Stanford Graduate School of Business (GSB). In an intriguing second-quarter turn of plays, Hurley guided Cavalry to move up its stake in Advanced Micro Devices, Inc. (NASDAQ:AMD), but to turn the tables on Tesla Inc (NASDAQ:TSLA) and Apple Inc. (NASDAQ:AAPL).
Advanced Micro Devices Sees a Bullish Bet Raised
Cavalry is dialing up in AMD, buying 785,713 shares in the second quarter that has now taken the firm’s stake up to 1,161,337 shares worth $14,494,00. Interestingly, Hurley’s savvy tech play preceded Monday’s dual announcement from two companies: the chip giant has shaken hands with China’s largest Internet search company Baidu, where Baidu will implement AMD’s Radeon Instinct GPU’s in its data centers for boosted workload capacity.
Also take under account that the chip giant just brought a counterpunch into the chip-maker arena against Intel with a Ryzen chip launch in March- a highly competitive product that Merrill Lynch analyst Vivek Arya believes beats Intel on “multi-tasking/productivity” at a fiercely advantageous price.
Therefore, the analyst reiterates a Buy rating on AMD with a price target of $18, which implies a 48% increase from where the stock is currently trading. (To watch Arya’s track record, click here)
With MD’s new Baidu alliance, its Radeon Instinct GPU line has a chance to get the upper edge in artificial intelligence, the key battleground of the future. Cavalry is not the only one taking notice of the chip giant’s strong footing in the market, and its play for a bigger AMD investment could be one that results in noteworthy gains.
Wall Street’s vote is one that backs the giant, with TipRanks analytics demonstrating AMD as a Buy. Out of 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 nearly 20%, the stock’s consensus target price stands at $14.54.
Backpedaling on Tesla
John Hurley is not putting all his dice behind Tesla these days, as in his second quarter play, the hedge fund guru dropped 23,172 shares, taking his position to 20,268 shares worth $7,329,000. The hedge fund manager is not the only one on the Street indicating whispers of apprehension on the electric car giant, as Stephen Jurvetson, a man who has backed CEO Elon Musk’s brainchild for years, just ditched 44,777 shares- a whopping $15.2 million cut.
Keep in mind that globally Jurvetson owned the first ever Model S; this is the man who only came second to owning the Model X to CEO Musk himself; and the corporate insider stands as the fifth owner of Tesla’s forthcoming mass-market Model 3. Surely Jurvetson’s decision to unload Tesla shares is not one that comes lightly to one so well-known for loyalty to the brand’s legacy.
However, Jurvetson has not sacrificed all hope in Tesla, as his holding still boasts past 104,000 shares worth $35 plus million, which does not include any unexercised stock options. Yet, even though the shares left still pack a punch, it matters that the insider’s sale of shares exceeded $15 million, marking a meaningful amount traded away. Jurvetson has built his career on eyeing valuations in his trading strategy, from early to growth-stage investments at Draper Fisher Jurvetson. When this insider sells Tesla shares, it is a key move that bears watching.
Perhaps it is a matter of strategy for both Hurley and Jurvetson. The giant’s stock price has circled twice over since winter of last year, which would make a sale now quite profitable.
These traders are not the only ones dubious on their investments in the electric car giant, as TipRanks analytics indicate TSLA as a Hold. Based on 17 analysts polled by TipRanks in the last 3 months, 5 rate a Buy on Tesla stock, 7 maintain a Hold, while 5 issue a Sell on the stock. The 12-month average price target stands at $314.08, marking a nearly 10% downside from where the stock is currently trading.
Apple Gets a Slice Smaller
Apparently, Apple is not as juicy with prospects for Cavalry these days, as the firm shed 138,641 shares to a holding of 59,686 shares worth $8,596,000. Interestingly, Hurley’s move was to backpedal on the tech titan ahead of what many on the Street are predicting to be a gold mine of an iPhone upgrade cycle.
Top analyst Michael Walkley at Canaccord for one is looking for the 10th anniversary edition of the iPhone model to be a crucial “record earnings” driver on back of bringing about robust iPhone replacement sales. On top of the fact word on the Street has it that the market will be clamoring for the new iPhone, the analyst has taken consumer surveys exhibiting high interest and enthusiasm for the prospective September launch.
As such, the analyst maintains a Buy rating on AAPL stock with a $180 price target, which represents a 10% increase from current levels.
Michael Walkley has a very good TipRanks score with a 64% success rate and a high ranking of #35 out of 4,621 analysts. Walkley garners 19.3% in his annual returns. When recommending AAPL, Walkley earns 25.7% in average profits on the stock.
“Mad Money” host Jim Cramer of CNBC echoes Walkley’s bullish sentiment in anticipation of the new iPhone, believing that Apple’s launch outweighs Hurricane Harvey on the significance scale- particularly keeping in mind the launch could hit as early as September 12th, far more in advance than anyone on the Street had been predicting.
“Don’t overthink the question of who wins from this new iPhone iteration. Apple wins,” asserts the “Mad Money” host, who boils it down: “So here’s the bottom line: while Harvey dominates the headlines, takeovers and an accelerated iPhone launch explain a lot more of today’s gyrations than the storm of the decade.” In fact, Cramer wagers that even a stock like Broadcom stands to soar on back of the forthcoming major Apple ramp.
Cramer advises, “Always remember that what matters to normal people isn’t necessarily what matters to the stock market,” and his bet is that people are going to care a whole lot more than what Hurley has planned for the iPhone 8 debut.
Most of Wall Street is stepping in line in support behind the titan, with TipRanks analytics showcasing AAPL as a Buy. Out of 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 5%, the stock’s consensus target price stands at $170.42.