It was a volatile week for to overall market, with the S&P 500 climbing about 1.2% before it retreated and ended the week down about 0.3%. But it was an even more volatile week for these three stocks.
- Netflix (NASDAQ:NFLX) saw its stock jump about 10% on Tuesday, following its better-than-expected first-quarter earnings release.
- Twitter (NYSE:TWTR) climbed 12% during the week, supported by two bullish notes from analysts.
- Apple (NASDAQ:AAPL) finished the week down about 6% as analysts lowered their forecasts for iPhone sales.
Here’s a look at each of these stories.
Netflix’s big quarter
There’s no denying it. Netflix is on a roll. After a strong fourth quarter, expectations going into the streaming-TV company’s first quarter were very high. Yet Netflix still managed to impress.
Total revenue for the period jumped 40.4% year over year — an acceleration from Netflix’s 32.6% revenue growth in Q4 and above management’s outlook for 39.8% revenue growth. The strong increase in revenue was driven by a 43% jump in streaming revenue — the fastest year-over-year growth rate Netflix’s streaming business has ever seen.
Netflix’s international segment played a key role in the company’s momentum during the quarter. Paid streaming international subscribers climbed to 63.82 million, up from 44.99 million in the year-ago quarter.
Betting on Twitter
Meanwhile, bullishness toward Twitter mounted when Morgan Stanley analyst Brian Nowak changed his rating on the stock from underweight to over weight, citing improving user growth and ad sales.
Twitter stock was in the spotlight again on Friday when MKM Partners analyst Rob Sanderson changed his rating on the stock from neutral to buy (via Tech Trader Daily), giving the stock a $40 price target. Like Nowak, Sanderson pointed to improved monetization and user growth. He specifically nodded to Twitter’s double-digit year-over-year growth in daily active users for five quarters in a row as a reason to be optimistic. But Sanderson went a step further, noting that there’s also an “uber-bull case,” which includes the potential for Twitter to eventually reach a mainstream audience.
These analysts’ bullishness will be put to the test when Twitter reports its first-quarter results on Wednesday, April 25.
iPhone sales: Worse than expected?
Though Apple’s fiscal second-quarter results are scheduled for May 1, analysts are looking ahead to the tech giant’s fiscal third quarter. Following worse-than-expected guidance from an Apple supplier this week, several analysts expressed concerns about Apple’s third-quarter iPhone sales.
One of the most notable analyst notes was one from longtime Apple analyst Katy Huberty from Morgan Stanley. She believes the quarterly revenue guidance Apple will provide in its fiscal second-quarter results may be lower than expected. “We expect Apple to report an in-line March quarter, but are cautious into earnings on May 1 due to our belief that June quarter consensus estimates need to be revised lower.” Huberty, however, remained bullish on the stock, telling clients that a post-earnings dip could be a buying opportunity.
But since Huberty’s analyst note itself sparked a sell-off in Apple stock, helping already conservatively priced shares become even cheaper, the buying opportunity may have arrived early.