Yahoo Finance’s Daniel Howley joins the Live show to discuss the best tech stocks of 2022, which include Apple and Microsoft.
Video Transcript
BRAD SMITH: It’s been a rough year for tech, to say the least. And while it’s been a sea of pain across the board for the sector, we are taking a look at the tech names in 2022 that have done better than its competitors, making it the best-ish performers of the year. With all the details here now, we’ve got Yahoo Finance’s Dan Howley. Dan.
DAN HOWLEY: That’s right, Brad. Yeah, not a great year for tech by any stretch of the imagination. Not a good year for the S&P 500 at all. But there are some companies that manage to do, as you said, better than others. They’re bad and then the worst. So these are the best-ish kind of companies. We obviously have Apple, Microsoft, and Qualcomm. Let’s start off with Apple, which, year to date, as of the close on the 20th, had a whopping negative 25.49% on its stock price. And so, not great.
This isn’t something you would normally have as a best of the year, but still, as far as the tech basket that we looked at goes, this was the top performer. And if you want to talk about why Apple did well, its Q1 had record revenue. It continued to do well throughout the year, posting record quarters for each subsequent quarter on the power of the iPhone sales.
We know that towards the end of the year, there were those disruptions as far as protests at the plant over in China, where they make the iPhone Pro, the iPhone 14 Pro. That caused some slowdowns in the ability for iPhones to get into consumers’ hands. And then we had heard that Apple was also telling its manufacturers to slow down the production of the iPhone 14+, just because people simply weren’t that interested in it. So it’s been rough going for Apple, as it has been the rest of the sector.
But as far as the basket that we looked at, it could have been a lot worse. After Apple, we also have Microsoft, another, obviously, big stalwart in the tech space. They continue to do well as far as their cloud offerings go, the Azure platform being the main standout there.
But the problem was that they started to see year over year growth slow as far as that all important business goes. They still managed to do very well. We obviously had the cloud up 20% year over year in Q1 fiscal 2023. That’s their most recent quarter. Their calendar is all sorts of mixed up. So they aren’t doing exactly bad, but they did manage to beat out the likes of Amazon and Google as far as the cloud business goes. And so they’re one of our best-ish.
And then finally, surprisingly, a chip company, we have Qualcomm. While Intel, AMD, Nvidia were all basically dogs for the year, Qualcomm managed to do relatively well. And the reason for that has to do with a number of things, chief among them the fact that they’re trying to diversify outside of relying so heavily on the handset space. So they’re getting into servers. They’re getting into PCs. They’re getting into automotive. And they’ve been doing this for some time, but they seem to be stepping it up a lot more.
The other thing had to do with the fact that their 5G chips are going to continue to be in Apple’s iPhones. They originally were only expecting to provide roughly 20% of the chips for iPhones next year. Now they’re going to be somewhere around 100%. And that has to do with the fact that Apple simply hasn’t been able to get the technology to where they want it to be. Qualcomm’s already got it, so why not just go ahead and continue to use there? So for the year, these are the three– I mean, it’s just laughable– best-ish tech stocks that we’ve managed to pull together. We’ll have the worst tomorrow, and my God, those are bad.
JULIE HYMAN: I don’t know. I’m bracing myself for that. I mean–
DAN HOWLEY: They’re rough.
JULIE HYMAN: Yeah, I mean, I’m looking at the Philadelphia Semiconductor Index, and every single component in there was down on the year. How are these company executives, how are analysts, how are investors feeling after this year that they have had?
DAN HOWLEY: It’s interesting. It’s because we obviously have talked about these trends that we’ve seen where PC sales down, smartphone sales. People are starting to pull back a little bit. The big spenders, the businesses, they’re starting to pull back a little bit, just because of inflationary pressures. The idea that maybe we’re going into recession, that seems to change that narrative every day. But that seems to be the big issue for a lot of these companies. That, and we had the huge problems with supply during the pandemic era.
Now there’s just too much inventory because people aren’t buying enough of them. They already put all of these products out there. So they’re trying to get rid of all that extra channel inventory. So that’s really the main discussion that we’re seeing overall. But I think going forward, they’re a lot more upbeat than you otherwise might think, considering the numbers that we’re seeing.
JULIE HYMAN: Yeah, I wouldn’t expect very much upbeat at all, given those returns. Thanks so much, Dan Howley. Appreciate it.
