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Apple CEO Tim Cook Ends Stock Slide With Reassuring TV Appearance

Apple ( AAPL ) stock rose Tuesday, a day after CEO Tim Cook appeared on CNBC’s “Mad Money” to discuss the company’s prospects after last week’s disappointing March-quarter earnings report. Apple shares were up 1%, above 94, in midday trading on the stock market today . Before Tuesday, the stock had fallen for eight straight trading sessions, tying its record losing streak. Apple stock has never had nine straight down days, but it has had four eight-day slumps, Bloomberg reported . The last time Apple had eight straight down days was in July 1998, a month before recently returned CEO Steve Jobs introduced the all-in-one iMac computer, the first in a line of hit products that fueled the company’s comeback from near bankruptcy. Cook told “ Mad Money ” host Jim Cramer that the downturn in Apple shares was a “huge overreaction” to the company’s fiscal Q2 report on April 26. “We just had an incredible quarter by absolute standards, $50 billion-plus in revenues and $10 billion in profits,” Cook said. “To put that in perspective, the $10 billion is more than any other company makes. So it was a pretty good quarter, but not up to the Street’s expectations clearly.” Cook acknowledged that iPhone owners are taking longer to upgrade their handsets. The company is facing difficult comparisons to the hugely popular iPhone 6 series, as well as difficult macroeconomic conditions, he said. The smartphone market still holds a lot of opportunity for Apple, especially in emerging markets like India, he said. IPhone In Line For ‘Great Innovation’ Cook hinted at “great innovation” coming in future iPhones that will entice people to upgrade. “We are going to give you things that you can’t live without, that you just don’t know you need today,” Cook said. Cook also talked up Apple’s fast-growing services business, including the App Store, Apple Music and Apple Pay. Cook said concerns about Apple’s prospects in China are overblown. Smartphone sales have slowed there, but Apple is seeing a big increase in switchers from Android phones. Plus, its recently launched iPhone SE, a lower-priced 4-inch smartphone, is selling well, he said. “I could not be more optimistic about China,” Cook said. “I think the long-term thesis is intact.” Cook made veiled comments about upcoming new products that Apple is developing. “We’re fairly secretive. We don’t talk about products that are in the road map,” Cook said. “But I would tell you that we’re incredibly excited about things we’re working on. Incredibly excited. And so I don’t want to be more specific than that.” Sterne Agee CRT analyst Rob Cihra on Tuesday reiterated his buy rating on Apple stock with a price target of 135, despite the company’s challenges in China. “China flipped from Apple’s biggest tailwind to headwind last quarter,” he said in a research report. “Yet we do not see China’s slowdown as Apple-specific nor competitive.” Apple is facing difficult comparisons to huge growth from the iPhone 6 launch in China, especially from leading wireless carrier China Mobile ( CHL ), Cihra said. Apple’s sales in China fell 26% year over year in the March quarter. “The math hurts, as China accounted for 26% of revenue in calendar year 2015 and was responsible for 43% of Apple’s entire growth calendar years 2011-2015.” RELATED: Has Apple Lost Its Mojo? Epic Stock Slide Continues For Eighth Day Apple’s PC Market Share Hits New High; Windows Notches Fresh Low

Google ‘Needs To Look Back To China’ To Boost Growth, Says Edison

Google, which withdrew its Internet search engine from China in 2010 after a disagreement over the country’s censorship rules, “needs to look back to China to bolster its flagging growth,” according to an industry note on Friday from Edison Investment Research analyst Richard Windsor. Edison’s research note comes as Google CEO Sundar Pichai has been on a visit to China involving Google’s AlphaGo artificial intelligence program , according to Chinese media reports. Lacking a search presence in China was initially not a problem because the search giant — now the largest unit within parent company Alphabet ( GOOGL ) — was experiencing quick growth in its core developed markets, said Windsor. With growth in those markets now slowing, “Google needs to look back to China” and that country’s expanding base of Internet users, said Windsor. However, convincing the Chinese government to let Google return will be a tall order, Windsor said, and the tech giant will likely “fail to get any real traction” now that local competitors have come on strong. Baidu ( BIDU ), which was Google’s chief search rival when the U.S. firm was in the Chinese market, is currently China’s largest search provider. “Even if the Chinese authorities let Google back in, they are very likely to place limitations upon Google, such that the home-grown crowd (Baidu, Tencent Holdings ( TCEHY ), Alibaba Group ( BABA ), Xiaomi and China Mobile ( CHL )) have the advantage,” Windsor said. “Secondly, the Chinese have been very busy developing their own ecosystems over the last six years or so, and this is no longer the virgin territory that it once was. Edison in fact estimates that 91% of all China ecosystem users are already using Baidu’s services, with 87% also playing games and chatting with Tencent,” he said. Google will have to fight for market share “even to get a toehold outside of Hong Kong (where Google is not blocked),” he said. “The net result is that the Chinese market will be a tough one for Google to crack, even with a level playing field,” Windsor said, adding that “Google is unlikely to get much more than the position in Hong Kong that it already has.” Still, Windsor said, “The good news for Google is that market expectations for its success in China are almost non-existent, and against that backdrop, the short-term outlook is reasonably rosy.” In 2010, Google said that it refused to self-censor content for Chinese services before closing its local search page and directing users to its website in Hong Kong. Other U.S.-based Internet firms, including professional networking leader LinkedIn ( LNKD ), operate in China and must censor their local content. Facebook ( FB ) and other Western social media, including Twitter ( TWTR ), are banned in China. Alphabet stock was up a fraction in afternoon trading in the stock market today , near 769, while Tencent stock was also up a fraction, near 21, and LinkedIn stock was up more than 1%, near 116. U.S.-listed Baidu stock was down a fraction, near 190, and Alibaba stock was also down a fraction, near 79.

Finisar Stock Jumps, With Q3 Profit Beating As China Demand Grows

Shares of  Finisar ( FNSR ), a supplier of fiber optic networking devices to Google and Verizon Communications, jumped to a seven-month high after the company posted fiscal-third-quarter earnings late Thursday that topped views and forecast current-quarter revenue above the consensus estimate. A pick-up in demand for fiber optic devices from China could boost Sunnyvale, Calif.-based Finisar, analysts say. China Mobile ( CHL ) and other wireless firms are building out new networks. And China’s ZTE — the mobile gear maker which was the object of a U.S. government export ban this week for its sales to Iran — is not a “material” customer of Finisar, analysts say. Verizon ( VZ ), meanwhile, is among the U.S. telecom companies upgrading landline fiber optic networks in metropolitan areas to 100-gigabit-per-second technology. “Finisar reported solid fiscal Q3 results, with EPS coming in above Street expectations, and the company guided (current-quarter) revenue and EPS ahead of consensus estimates,” said Troy Jensen, a Piper Jaffray analyst, in a research report. “The upbeat fiscal Q3 results and forward guidance were driven by robust demand for 100G telco and datacom optics.” Finisar stock was up 18% in morning trading in the stock market today , near 17, as other fiber optic stocks also gained. Lumentum Holdings ( LITE ) advanced 1.5%, while Oclaro ( OCLR ), Viavi Solutions ( VIAV ) and Applied Optoelectronics ( AAOI ) were all higher by more than 1.5%. And while disappointing results at Ciena ( CIEN ) last week had led to sharp sell-off in fiber optic stocks, Ciena stock was up nearly 3% Friday morning. IBD’s Telecom-Fiber Optics group as a whole rose more than 3%. It ranks No. 81 out of 197 industry groups tracked. While phone companies such as Verizon have been the biggest customers of the fiber optic parts makers,  Internet companies such as Alphabet ’s ( GOOGL ) Google, Amazon.com ( AMZN ) and Facebook ( FB ) are also boosting demand as they build new data centers . In its fiscal Q3 ended Jan. 31, Finisar said it earned 25 cents per share minus items, flat from the year-earlier period but topping analysts estimates of 22 cents. For the current quarter ending in April, Finisar forecasts profit  of  22 cents to 28 cents, where analysts had modeled 21 cents. Finisar, which has a relatively weak IBD Composite rating of 45, said Q3 revenue rose 1% to $309.2 million, missing consensus estimates of $311 million. But for the current quarter, Finisar forecasts revenue of $317 million at the midpoint of its range, above the $315 million modeled by analysts. Merger talks between Finisar and Lumentum broke off last year, analysts said. Intensified competition has pressured the profit margins of fiber optic parts makers. “Finisar is seeing growth on a number of fronts; however, the increasingly competitive 100G datacom market holds us back for now,” said Jefferies analyst James Kisner, in a report. He has a neutral rating on Finisar stock. Image provided by Shutterstock .