There are two updates on Tuesday from analysts at UBS and Mizuho on Apple (AAPL) and Qualcomm (QCOM), respectively. Both research notes give us reasons to be optimistic long-term. Starting with Apple, analysts over at UBS reiterated their buy rating and $185 per-share price target while calling out significant market share gains in China in May. According to their research, they believe that China iPhone shipments were actually up roughly 13% annually and a whopping 155% monthly. That’s despite over all smartphone shipments contracting 9% annually and expanded about 16% monthly. Factoring in April’s results, the analysts peg Apple’s two-month shipments down 9%, outperforming the broader smartphone market, which they believe saw shipments fall 23% during that time. Bottom line, Apple’s customer loyalty appears to be resulting in relative strength and market share gains, even as the overall smartphone market remains under pressure due to China’s ongoing Covid lockdowns and a broader global economic growth slowdown. For Qualcomm, analysts at Mizuho reduced their price target to $168 per share from $185, but they reiterated their buy rating as part of a broader handset market update ahead of second quarter earnings season. Broadly speaking, the analysts believe that 5G units will be up less than previously expected — about 15% versus prior expectations of about 40% versus the year ago period. They also factored in higher inventory levels against the backdrop of slowing demand. Like the analysts at UBS, they called out the decline in the China handsets market. That said, Mizuho analysts do “remain optimistic on secular 5G ramp longer-term,” despite forward valuations “near cycle lows.” Stocks of companies connected to smartphones could provide an opportunity once estimates have been revised lower to more accurately reflect the macroeconomic troubles around the world. During the Club’s “Morning Meeting” livestream, we agreed that upside is likely limited until estimates com down. However, we also think the downside to be just as limited in the near-term and even more so in the long-term. That’s because Qualcomm’s current multiple provides a safety cushion, a view backed by the simple fact that even with Mizuho’s estimate cut, their new price target comes in nearly 35% above current levels. As a result, while we don’t like to buy into strength, we are certainly not selling QCOM into this rally and would instead be buyers should the sellers step back in and pull shares lower from here. For anybody who may have missed it, a replay of Jim Cramer’s discussion with CEO Cristiano Amon on Friday’s “Mad Money” can be viewed here . During the interview, Amon said, “At the end of the day, all of the growth fundamentals of the company remain intact,” adding the company continues to gain share with important smartphone original equipment manufacturers (OEMs) such as Samsung. Of course, the core of our investment thesis is predicated on Qualcomm’s efforts to diversify its revenue stream — and as a result, we were also pleased to hear that the automotive and internet of things businesses continue to grow. (Jim Cramer’s Charitable Trust is long AAPL and QCOM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
