President Donald Trump released a series of tweets earlier Monday, Feb. 25, announcing that in light of the successful trade talks - and substantial progress made over the last two weeks by the U.S. negotiating team - he will be delaying the tariff increases scheduled for March 1. Stocks are reacting positively to the news, with gains in the major Asian and European markets, as well as in New York.

This news is genuinely bullish. Sentiment has swung back and forth over the last year, as the U.S. and China first seemed careening toward a trade war and then sat down to talk. Here we'll dive into TipRanks' database and see what Wall Street's top analysts have to say about four stocks heavily involved in the China trade. All are currently rated moderate buy but all have shown a recent upswing, and stand to gain considerably if Trump's optimism pans out.


Semiconductor chip companies are heavily invested in China, on both the production and sales ends. Nvidia Corp. (NVDA) - Get Report is no exception, and in fact 56% of its sales are to the Chinese market. With so much exposure, Nvidia was sure to take a battering from the tariff dispute. But that wasn't the company's only problem. Starting in October, NVDA shares plummeted and have only recently begun a modest climb back up. The stock is down $130 since it's Oct. 1 high of $289.

Basically, Nvidia suffered from too much bull market in the two years before the rug was pulled out. Investors saw it as a profit-making cash cow, and drove the share price up to an unsustainable level. Nvidia retains a great product and a solid market share so what we're seeing now is mostly a correction. Should the trade dispute see an amicable resolution, we may also see additional gains for Nvidia.

Jefferies analyst Mark Lipacis, rated No. 15 out of 5,205 in the TipRanks database, is blunt about it in his review. Despite the company beating its fourth-quarter guidance, and predicting increased product orders once the trade dispute is resolved, Lipacis "expects the stock to mark-time until order growth resumes in Q2." His outlook going past the second quarter is reasonably upbeat; he rates the stock as a buy and his $185 price target suggests a 16% upside.

Meanwhile, Oppenheimer's Rick Schafer also gives NVDA a buy rating, and sees a more diversified future for the company. He said, "With the introduction of new solutions like Tegra for the auto market, see Nvidia's PC dependence diminishing somewhat." He suggests a 19% upside for the stock, with a $190 price target.

Overall, Nvidia holds a moderate buy rating from the analyst consensus. This is based on 21 buys, eight holds and two sells. The stock traded at $159 as of the close Friday, and the $184 average price target gives it a 16% upside.

Micron Technology

Micron Technology Inc. (MU) - Get Report , the seventh largest chipmaker globally, is up 30% year to date, riding high on a rebound from the 50% drop the stock saw in the last quarter of 2018. Slowing demand by smartphone makers and crypto-miners pummeled the company, but sentiment seems now to be reversing. While China has cracked down hard on crypto-mining in the last 18 months, smartphone production is booming, and Micron is well-positioned to gain from that. An easing of tariff pressure, or even an easing of the threat of tariff pressure, is bound to help the company, 55% of whose sales are in the Chinese market.

Market analysts see issues with Micron's supply chain as a potential headwind, but believe the company can weather this possible storm. Viyay Rakesh of Mizuho Securities said of the bumps ahead of MU, "Our checks in the supply chain continue to point to 1) weak China demand, 2) weak hyperscale ordering trends." A trade agreement between the U.S. and China would likely address the first of those checks, and justify Rakesh's $45 price target.

Deutsche Bank's Sidney Ho takes a similar but more upbeat view, saying, "Aggressive capex cuts by memory suppliers combined with a recovery in server demand should lead to a more favorable supply-demand environment by mid-2019." He sees a 12% upside to Micron, with a $48 target.

Overall, Micron has an average price target of $49, giving a 16% upside compared to the current share price of $42. The analyst consensus of moderate buy is based on 17 buy ratings, seven holds and one sell.


The world's largest semiconductor manufacturer, Intel Corp. (INTC) - Get Report sells 40% of its products to China. While the company's survival is not dependent on the China market, it's obviously a major factor. Of more immediate importance to Intel recently, however, was the company's search for a permanent CEO. Chief Financial Officer Bob Swan, who had been acting in an interim capacity for over half a year, was named to the position on Jan. 31.

The sudden stability at Intel is on the minds of analysts. From BMO Capital, Ambrish Srivastava used the announcement to reiterate his buy rating on INTC shares. His $58 dollar price target implies a 10% upside for Intel.

Morgan Stanley's Joseph Moore, however, has caused something of a stir among market watchers. He upgraded his rating on INTC to buy from neutral, and gave the stock a target price of $64 - suggesting a 22% upside. In his comments, he attributed his upgrade entirely to the choice of Swan in the head office: "We think that Intel can rerate higher around a more financially oriented CEO. While some investors wanted someone with more of a technology background, we think that one of Intel's biggest challenges in recent years has been its tendency to become enamored [sic] with technology over economics."

Intel's overall rating is another moderate buy, with this based on 12 buys, 11 holds and four sells. The company has an average price target of $53; the upside is only 1.8%, but that is likely an artifact of INTC's sharp rise in the markets in recent weeks - the stock has gained steadily since Swan was named CEO, rising from $46 to this past Friday's $52. In short, Intel has caught up to an outdated price target, and the analysts have not yet had time to set a new one. It's a situation that sets a new light on Moore's rating of the stock.


Apple Inc. (AAPL) - Get Report shares were recently hurt by several factors, including the combination of maturation and saturation in the smartphone market, and economic, trade, and tariff issues in China. China may have been the bigger factor - Apple makes 22% of its overall sales in China and depends on Chinese companies for its supply of chips. A disruption of the supply line, or an economic slowdown in China resulting in slower sales, or worse, both at once, will hit Apple hard. And it did.

CEO Tim Cook announced as much with his post-new year letter revising down the company's fourth-quarter guidance. In his letter, he specifically cited slowing iPhone sales in China as the main driver of Apple's lower revenue performance, but the company came back and beat the new, lower, forecast. Since the fourth-quarter report, shares have gained and stabilized; AAPL is now trading $20 above its Jan. 29 level.

Wall Street analysts mainly agree with the mass wisdom on this one. Webush's Daniel Ives said he sees a 15% upside potential for AAPL, saying, "Customer retention rates of 90%+ and 350 million iPhones in the window of an upgrade opportunity over the next 12 months." He gives the stock a price target of $200.

JPMorgan Chase analyst Samik Chatterjee noted that "supplier tracker showed early signs of stabilization and a continued organic push into services." With a more stable iPhone production and sales, and increased revenue from services - both indicated in incipient forms by the fourth-quarter report - he gives AAPL shares a buy rating and a $228 price target. His target suggests an optimistic 31% upside to the stock.

In aggregate, AAPL holds a moderate buy rating, with 17 buys and 18 holds. There are no sell ratings on the stock. The current share price is $175, while the average target is $176, giving an average upside of only 0.8%; like Intel, this appears to be a stock that has reached the analyst consensus and is now outpacing the market watchers.

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. Author: Michael Marcus.