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Facebook’s Dominance In App Ecosystem Is Striking, Above Alphabet

Facebook ( FB ) completely dominates the app field, taking a 60% market share in February, led by its WhatsApp and Messenger properties. Alphabet ( GOOGL ) followed Facebook in app downloads, with YouTube being the most popular, according to an analysis by Nomura. Netflix ( NFLX ) also showed impressive strength, while Spotify outpaced Pandora Media ( P ). “With apps representing about 80% of total time spent on mobile, the importance of app trends is difficult to understate,” wrote Nomura analyst Anthony DiClemente in a research report. “App user trends have major implications for industry and company-specific shifts in consumer behavior, and ultimately advertising spend trend.” User engagement trends are leading indicators of mobile ad spending. DiClemente estimates mobile ad spend should reach $75 billion globally in 2016, growing 44% year over year. Alphabet and Facebook scored big in a recent survey of advertisers, receiving the highest budget allocations and the best return on investment of digital media properties. DiClemente examined 14 of the most prominent social apps on both the Apple ( AAPL ) and Alphabet Android operating systems. The apps covered were downloaded a total of 217 million times in February. In the analysis, using data from SensorTower , DiClemente said Facebook properties held the top four spots in the global app download ranking and comprised a full 60% of the 217 million downloads. WhatsApp and Messenger held the top two spots, with nearly 40 million downloads each. For comparison, the Facebook flagship app was downloaded 30 million times in February, while Instagram posted 22 million downloads. Messenger is generally stronger in the U.S., while WhatsApp remains the preferred messaging service internationally, DiClemente said. “The strength of Facebook’s app portfolio reinforces our view that Facebook maintains a user growth and monetization runway,” DiClemente wrote. YouTube was by far the most popular suit of apps by Alphabet. It was downloaded 12.5 million times, far outpacing Google Gmail. But many Google apps come preloaded on Android phones and likely understates Google’s prominence, DiClemente wrote. Following YouTube, music sharing site Spotify tied with Netflix, with both showing 7.9 million downloads. Spotify competitor Pandora had 5.3 million downloads. Pandora still leads in the U.S., but Spotify is beating Pandora by 75% in global downloads. At Netflix, international downloads surpassed domestic totals following January’s expansion into 130 countries. Alphabet and IBD 50 company Facebook carry best-possible IBD Composite Ratings of 99. Both were up more than 1% in midday trading in the stock market today , with major stock indexes up. Image provided by Shutterstock .

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 .

5 Chip Stocks To Watch, With Apple’s Big Event March 21

A basket of top-rated chip stocks are making moves around buy points now. And Apple ( AAPL ), a big user of semiconductors, just sent out press invitations for a March 21 event where it’s expected to introduce a small iPhone and another iPad. So which chip stocks are highly rated by IBD and get at least some of their business from Apple?  Broadcom ( AVGO ), IBD Leaderboard stock  Macom Technology ( MTSI ), Cirrus Logic ( CRUS ), Mellanox ( MLNX ) and Nvidia ( NVDA ) make the list. All are at least somewhat diversified, with revenue streams in everything from data center and mobile networking systems to powerful graphics chips for virtual reality and gaming, to connected car technology and now even artificial intelligence. Chips And Profit Going into Friday trading, IBD 50 stock Broadcom was a few percentage points into buy range from a double bottom base. Broadcom made IBD’s Stocks On The Move screen early Thursday, heading up in high volume alongside Google owner Alphabet ( GOOGL ) and a few other stocks. Early Thursday, Broadcom’s management team had presented at a Susquehanna Financial analysts’ conference. “It’s a great time to operate in the semiconductor industry,” CEO Hock Tan said there. “You have a substantial profit pool … compared to similar industries of the same size.” Loading the player…   Broadcom started giving up some of its gains as stock indexes dipped into the red with falling oil prices, but it ended up with a 1.7% rise for the day. Several other top-rated chip stocks declined Thursday. Mellanox slipped to the bottom of buy range. So did Macom Technology. Nvidia edged down to about 4% under a buy point from a cup base. While the stock market’s in a confirmed uptrend, much of the action is choppy with ups and downs in oil prices and economic concerns around the globe. All five of these top-ranked chipmakers have fallen from a week ago, between 1% and 7%, with the S&P 500 index down 1%. Cirrus Logic and Mellanox were up 14% and 15% this year, respectively, going into Friday. Macom was up 1% while Avago was down 1% and Nvidia down 4%. Nvidia, an IBD 50 stock, has the strongest IBD Composite Rating of the bunch, a best-possible 99, taking into account earnings growth, stock price gains and several other metrics. The others range between 90 and 98 in Composite Rating. Apple Chips It will take awhile for teardowns to show whose chips go into whatever new products Apple introduces, and longer for those chips to translate into reported sales, and lagging iPhone sales growth lately hasn’t helped the chips. Apple Sets March 21 To Launch Small iPhone, New iPad, Watch Bands https://t.co/MxIpxMFKvc pic.twitter.com/iPxQ1lTAFF — Investors.com (@IBDinvestors) March 10, 2016 Other markets are driving growth, however. Nvidia, for instance, said in its fourth quarter report, in February, that it’s at the “center of four exciting growth opportunities — PC gaming, VR (virtual reality), deep learning and self-driving cars.” Nvidia is a partner to electric car maker  Tesla Motors ( TSLA ) and other auto manufacturers, and said last month that it’s in an alliance with Facebook ( FB ) and Chinese Internet company Alibaba Group ( BABA ) for speedy artificial intelligence chips.