Out Fox The $treet

Baidu continues to slump to multi-year lows. The Chinese company has growth opportunities outside internet search in voice assistants and self-driving cars, among others. The stock remains exceptionally cheap in the large-cap technology sector as margins rebound with the exit of transaction-related businesses. The general weakness in Chinese tech stocks provides a substantial opportunity for a stock like Baidu ( BIDU ). The internet search leader in China has in-roads to new technologies and the Chinese economy is still transitioning online while the economy is growing at one of the fastest rates in the world. My investment research continues to support buying weakness in the stock, especially on irrational fears related to Google ( GOOG , GOOGL ) entering the Chinese internet search market. Read the full article on Seeking Alpha. 

IBM agreed to pay a 63% premium for Red Hat to become a leader in hybrid cloud. The deal is accretive to free cash flows starting around 2020. The $34 billion of additional net debt adds risk to the story. The transformative deal could be the bold move to change the perception of the stock trading at only 8.5x '19 earnings estimates. The market has long complained that   IBM   ( IBM ) hasn't made a bold move to transform the company. The move to acquire   Red Hat   ( RHT ) was the move that the market always wanted, but no doubt views as highly risky now. The deal premium adds more risk than justified but IBM might just pull the company out of this tailspin with this bold move. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please review the disclaimer page for more details.   

eBay tanked following PayPal reporting weak TPV numbers for the online merchant. The online retailer has only started the process of managed payments that removes PayPal from the process. The stock is incredibly cheap with no actual confirmation that GMV will be weak due to the payments transition. eBay   ( EBAY ) plunged 9% on Friday as the market reacted to GMV numbers provided by   PayPal   ( PYPL ). Considering eBay is in the process of implementing managed payments that removes PayPal from the process, investors need to be careful with data from a potentially unhappy partner. My   investment thesis   remains bullish. Read the full article on Seeking Alpha.  Disclosure: Long EBAY. Please review the disclaimer page for more details. 

Square falls after moving further into risky loans. The departure of the CFO is another big risk for the stock. The long-term margin picture is mostly misunderstood by investors leading to the insane valuation when the stock reached $100. Square is still too expensive at $70 with these negative signals. In a predictable move, an overpriced stock like   Square   ( SQ ) quickly surged to $100 and just as quickly gave up the gains of the last few weeks. The mobile-payments company has quickly expanded into new areas and the market rapidly accepted them as easy money. Some likely doubts are emerging over a further expansion into the loan business, questioning if Square is running out of opportunities for customer expansion in more strategic areas. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

The market is too focused on where AMD came from in this cycle due to irrational lows. Compared to past trends with Intel, AMD hasn't reached market share levels, EPS numbers, or stock prices to even closely match past achievements. Analysts are only tepidly bullish on AMD with the majority of analysts having Hold or Sell ratings. The dip to $26 is an opportunity after a weak market over the last week. Historically,   Advanced Micro Devices   ( AMD ) has generated a more volatile earnings trend than that of rival   Intel   ( INTC ). The weak link in the market always takes the hardest hit in down cycles as the market leader can squeeze profits. The recent dip in AMD to $26 is due in part to misplaced market fears that Intel is roaring back to life to reinsert their dominance. The data doesn't support this scenario, keeping us bullish on AMD having more magic left in this cycle. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Pl

Apple apparently obtained a large hike to the fees Google pay as the default search browser on Apple products. Google has recently complained about the rising TAC. The near pure profit search revenues should boost FY19 EPS targets towards $14.50. One doesn't have to look very hard to make a   bullish thesis   on   Apple   ( AAPL ) based on their growth in the Services division. The shocking news of the last week is that a portion of the revenue base is set for a major boost thanks to   Google   ( GOOG ,   GOOGL ). These high-margin revenues might provide a bigger boost to the bottom line than the new iPhones. Read the full article on Seeking Alpha.  Disclosure: Long AAPL. Please review the disclaimer page for more details.   

AT&T launched their rebranded digital ad business. Xandr is only estimated at 3% of the total revenue base. Any success of Xandr provides upside to my previous $40 base case target. The business is off to a troubling start with AppNexus CEO leaving. Last week,   AT&T   ( T ) ushered in the aggressive move into advertising. The wireless giant hopes to more effectively compete in the advertising sector against the tech giants by collecting more data from customers via various video and wireless connections. Unfortunately, the   newly created Xandr   is more likely to resemble the failure of Oath from   Verizon Communications ( VZ ). Read the full article on Seeking Alpha.  Disclosure: Long T. Please read the disclaimer page for more details.   

Qualcomm has growth driver in the Internet-of-Things (IoT) market. The market will start looking beyond just mobile communications as FY19 starts. The $7 EPS target is a base case for FY19 with growth areas providing upside potential in the future. As   Qualcomm   ( QCOM ) looks to move away from the termination of the   NXP Semi.   ( NXPI ) merger, a big key is whether the company can shift away from reliant on the maturing wireless sector. The NXP Semi. deal promised a shift into connected cars, but Qualcomm alone is making a strong push into the promising IoT sector providing a solid long-term boost to my   investment thesis on the cheap stock. Read the full article on Seeking Alpha.  Disclosure: Long QCOM. Please review the disclaimer page for more details.