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.

Hewlett Packard trumped this morning Dell’s all cash bid for 3Par (PAR) by another 33% and sparked a speculation in the whole enterprise data storage sector that other companies may become also takeover targets. One of the beneficiaries were Isilon Systems (ISLN) showing a chart with a fine restart.

Isilon offers easily scalable cluster storage technology to enterprise customers. Their stock is still under water for early investors that bought directly at or after the IPO. Part of Isilon’s problems were accounting issues that terminated no less than 11 manager careers in that company including the CEO and CFO.

However, the company seems to be on a path to growth and is currently in their first year of profitability. For comparison here is the chart of PAR with its impressive jump of almost factor 3:

The blue revenues curve does not really seem to grow, which raises the question why did Dell and Hewlett Packard bid for PAR and not for ISLN. The answer could be simply that 3Par was cheaper than Isilon with regard to their price/sales ratios. Another answer could be hidden in the technology of their products.

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.

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.

Yesterday Apple got hit by news that a prominent consumer organization recommended to skip the iPhone 4 because of its faulty hardware. In their eternal search for the coolest appliance Apple seemed to have found a phone that does not work anymore as such. Really cool. Anyway, what I want to show here is the linkage between Apple’s and Cirrus’ stock:

The top chart is from CRUS and at the bottom we have AAPL. Yesterday the market was way up, but AAPL dipped and CRUS was also relatively weak. But overall CRUS shows a hefty relative strength compared to AAPL. Both react of course to the whole market with Apple being at least relatively strong against that benchmark.

So far CRUS is nicely up since my last post about the gadget mania. Earnings will be reported next week on 7/20 before the market opens. Hopefully the new era of small and cool hardware will propel it even more into the sky – to the place where it belongs.

During the last half year and especially the last month SanDisk’s stock has had a remarkable relative strength compared to the whole market.

This maker of flash memory is one beneficiary of the strong trend towards smart phones and tablet computers. Right now its chart has also the promising pattern of a restart in a longer trend.

However, there is a big caveat with this stock. As the long term chart reveals, SanDisk has a highly cyclical product, memory chips, which is probably the mother of all cycles. It remains to be seen whether this stock will be able to convert its cycling nature into a secularly trending growth monster, at least for some time.

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.

Integrated Silicon Solutions posted yesterday better than expected earnings and guided up for the next quarter. They have an even more impressive daily chart than Cirrus Logic.

Their long term chart shows the typical ups and downs without a real direction of an intact but not substantially growing semiconductor company. Similar to CRUS they have had three strong last quarters.