During Apple’s tech event today Steve Jobs revealed that Netflix will be on board of the next Apple TV set-top box. What a nice intraday chart of NFLX:

The market seemingly had to digest the news with a hefty hiccup. Seen from a longer perspective Netflix made a fine restart today:

The long-term chart shows a more slowly but steadily growing company with a relatively high valuation:

The best part of the news today was probably that Apple had not chosen one of Netflix’s direct competitors. But there is more strong competition in the video and TV market ranging from traditional broadcasters to the more Internet-centric giants like Google and Amazon. Perhaps even Microsoft wakes up at the end of this or the next year and tries to play its Johnny-comes-late-game.

TV and video streaming over the Internet is a hot topic right now and Netflix has a good starting position. Nonetheless, the slightest shift of favor towards a service from the competition may darken the outlook for its subscriber growth, which will inevitably make the stock look expensive.

This morning Intel (INTC) surprised everyone with its all cash offer for McAfee (MFE) valued at about $7.7 billion. McAfee is a software company best known for its antivirus scanners. Intel tells the world now that they want to incorporate security into mobile chips. They won’t put antivirus software directly into the silicon, but they plan to use McAfee’s knowledge to design security on the chip level.

Sure, McAfee covers more areas of expertise than antivirus scanners, all centered around security and there might be a few things that could be indeed crystallized into the chip, but it is still hard to believe that Intel paid such a steep price for such a small synergy. The market reacted accordingly.

McAfee bought lately some mobile security providers. Intel tries desperately to catch up and get its x86 processor line into mobile devices and smaller gadgets. Especially the iPad and its forthcoming clones will nibble into the netbook and even the PC market.

Does Intel see a chance somehow to defend its crumbling monopoly with the patent portfolio that comes with the acquisition? Do they hope that McAfee will enable them to force security standards built into the chip favoring their own processors? Are they planning to replace part of what belongs reasonably to the operating system with their chips and create another superfluous dependency on their products? Hard to say, but Intel’s move looks nothing but desperate to me.

For decades Intel cheated consumers, making them believe that they need an absolutely excessive processor, which is at least by a factor of 10 with regard to cost, number of transistors, and power consumption exaggerated.

You don’t believe that? Just bring up the task manager and identify the process that used by far most of your PC’s processor time – it is called the “idle” process. And that is only the main unit, other more specialized ones like the floating point unit are idling even more around. Intel has managed to add a huge bag of underused transistor graves around an already inefficient core.

The global waste of resources that this x86 juggernaut causes happened for the sake of market dominance – only Intel could produce these monster chips using the latest technology with a sustainable yield.

Finally the time of its competitor, ARM Holdings (ARMH), a designer of low power CPUs, has come. Intel has a lower power CPU – the Atom – but it still isn’t even close to what the ARM offers. For the foreseeable future phones and tablet computers will be non-Intel-Inside, which is, by the way, one reason why Windows 7 on a pad computer will be a flop.

Even the netbook market is at risk to be overtaken by really energy-saving processors like the ones from ARM. Perhaps the end of the Wintel monopoly will come faster than expected.

The long term chart of ARMH does not disclose much, because it is an ADR and there are no revenues and earnings lines in my database. Other than a trend walking up by a factor of 4 within 18 month there is not much to discover. The company had $492 million revenues in 2009 and was not really growing over the last years.

Perhaps ARM Holdings is too old and well known and its stock price has already more than anticipated all the hoopla about the iPad and other handheld devices. So, get off INTC but don’t bet on ARMH.

China New Borun (BORN) is a recent IPO that appears to have caught not the right wave. Its projected price range was somewhere at $12-$14, got revised to $8-$9 and finally the shares sold at only $7. After that disappointment it went further down to under $5, but from there it reversed courses and started an interesting trend.

What to say about fundamentals? This company produces alcohol as an ingredient for a beverage apparently called “baijiu”. Given the current price of $9.40, expected earnings for 2010 would result in a P/E ratio in the single digit range. Revenues rose in 2009 about 75%. The company is said to have an edge over the competition with its special production process, the stock seems to be cheap and the current trend is impressive.

Today Google shares advanced remarkably stronger than the market. At the same time Microsoft slid down even more remarkably in a market that was overall up. Coincidence?

For me there were two interesting pieces of news for Google today. Eric Schmidt said that there are now 200,000 Android smart phones sold per day. The market share of the mobile operating system Android is growing fast and that at the expense of all others, but foremost Microsoft seems to be the victim.

The other news read like this: The L.A. city council voted unanimously to go ahead with their move to Google Apps, the office suite in the cloud. In a few month 30.000 employees will be migrated.

Has the market reacted to the latter news and is this the beginning of hard times for Microsoft’s cornerstone of success, it’s office software?

One thing is for sure, this is a threshold phenomenon. For now Microsoft Office gets chosen, because everyone else is using it. You can’t make a mistake by imitating others, but if you try something new, it’s you who is to blame if something goes wrong.

But at some point, when early adopters have tested the uncharted terrain, when the “critical mass” has been reached for most of us looking for somebody to follow, people will give up their hesitation and use alternatives.

Once this process of changing perceptions has started, other products, or more generally ideas, are also profiting, even if they had not ignited the movement originally.

For example, free software like OpenOffice and Linux will eventually be carried along by successful products like Apple’s iPad and iPhone or Android smart phones, pads and netbooks.

These radio-enabled devices are all sending a subliminal message, which is getting continually louder: It has not necessarily to be “Wintel inside”. Perhaps in a few years we will all know that there is a live after Microsoft.

With a strong earnings report yesterday Baidu surpassed analysts’ expectations but seemingly didn’t surprise investors. Despite beating on the top line by 4c, revenues by a small margin and guiding revenues up for the next quarter, the stock was a relative laggard today. Revenues growth of 74% over the last year was still exceptionally strong for a company of this market capitalization.

The total Chinese search market grew by 53.2% in the second quarter alone, which seems to attribute massively to the revenues jump of Baidu’s latest quarter. Only the second reason was the decreasing competition from Google.

During the last 6 month Google lost 5.5% market share of the Chinese search market down from 32.8% and Baidu gained 6% over the 64.8% it had at the end of 2009. Due to Google’s semi-exit in the Chinese search business, Baidu was able to abruptly reverse the longstanding trend of the years before, where Google ate slowly but steadily into Baidu’s market share. For comparison here is the long term chart of GOOG since its IPO.

Google seems to be already a mature company, while Baidu’s fundamentals are still shooting up. But after the hesitance BIDU showed today to reward investors for this phenomenal quarter with an exploding price, my conclusion is still the same: For Baidu it is probably better to wait for a breakout of the base in the long term trend and Google is the inferior investment compared to Baidu.

After the close yesterday Apple reported a strong quarter. Visible in this weekly chart, the first two quarters of this year didn’t fall back from the Christmas sales peak (blue – revenues, pink – earnings). Apple ignited the afterburner.

The Cupertino company is already the tech vision leader and will soon surpass Microsoft with regard to revenues. Especially astonishing was their revenues guide for the next quarter. Apple used to play it safe and predict only a modest outlook. This time they seem to expect sales far above analysts consensus.

Either they want to color the negative headlines of Antennagate more positively and convert them into free advertising. Or the iPad sales were constrained this quarter mainly by supply and not demand and they expect the situation to improve. If it is the latter, Cirrus Logic may even be the better investment or trading vehicle.

CRUS follows Apple’s stock more closely on an intraday basis than justified by fundamental data. In the longer run it shows relative strength compared to AAPL. The market seems to expect a bull run in “gadget chips” for the next years.

Directly after the earnings report of Cirrus Logic this morning the stock didn’t react much. It was down with the whole market and with Apple. The correlation of Cirrus’ and Apple’s stock is remarkable. Cirrus’ rally today was more attributable to the move of AAPL ahead of Apple’s earnings release after the market closed than anything else.

Cirrus Logic beat by a penny and guided revenues for the next quarter up. The weekly chart demonstrates that this company is on the move these days.

The pink earnings line shows something else, namely a relatively small PE ratio (15 for the latest quarterly results extrapolated to a full year). The market still fears the cyclical semiconductor nature of this stock and is not willing to let its price shoot up more. Should the smart phone and tablet computer craze continue and Cirrus be profiting from it, Mr. Market may finally change its stance on this.

The chart above of the last 9 years shows clearly that CRUS used to be a cyclical stock. However, the rise of the blue revenues line and the driving growth prospects behind it are encouraging. Eventually this is a semiconductor stock and it will regain its cyclical character, but there is potential for an intermediate growth ride.

This morning Baidu takes a hit premarket and Google jumps up, because Google’s license for operating a web site in China has just been renewed. Looking at Google’s weekly chart reveals that the stock has been a laggard compared with the indices over the past months. The main reason has been the problem with the Chinese authorities, but there were also other clouds visible on the horizon.

Baidu’s chart shows that the stock has risen 6-fold over the last 18 month. Given the news today, the price could have exhausted its shorter term potential for now. So, GOOG has perhaps some snap-back potential, but isn’t at a high, while BIDU is at a high, but seems also to be expensive, at least in the short run.

Pricewise this is the classical situation, which leads so many to believe that the stock that fell back is the better investment candidate. Wrong, at least generally. In this case, however, there is new information involved. Google’s prospects in China don’t seem to be so dim as many have argued in the past.

Conversely there is still a risk that Baidu gets crushed by Google in the long run. It was the perceived elimination of this risk that made the stock run up so much, and not only the possible gain of Google’s current market share of web search in China.

Conclusion: For Baidu it seems better to wait for a real breakout of the base in a trend formation. Google may have some short term potential right now, but its growth also slowed down considerably since two years.

Baidu surprised with better than expected earnings and its stock gapped up this morning. It also guided up for the next quarter.

Remarkable was a note of the CEO that Google’s semi-exit will only moderately help Baidu and that there is still strong search competition in China. He also expects Baidu only be able to grab one third of Google’s business. Is this Asian understatement? The longer term chart reveals a very high expectation of the market that has resulted in a lofty price.

Is it too late to jump on board here? Of course not, but you have to trade the stock with the right system. As usual.

This was another great quarter for Apple with Mac sales up 33% compared to one year ago. They beat estimates easily and surprised with a future guidance that does not seem to be overly conservative as it used to be. Are they expecting a killer impact of the iPad, or do they want to help it with a soaring stock price?

The daily chart above matches the index and doesn’t reveal spectacular things. Looking at the weekly bar chart, Apple presents itself as the phoenix from the ashes in the world of bits and bytes. It had a stellar stock performance over the last seven years and is now everybody’s darling. Years to come of fine growth are everywhere anticipated, because of the enormous success Apple has with its gadgets that will continue to fuel Mac sales. The relative jump of the last two quarters in revenue (blue) and earnings (red) are due to accounting changes.

As usual, the typical question here is whether the stock is already expensive at this point. And the right answer is of course: It doesn’t matter. You trade it with the right system and when the trend begins to sputter, your system will act accordingly.