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Cisco's Big Potential Tailwind; Nvidia Could Get Stung by the Trade War -- ICYMI

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It's Monday and there's a lot of tech hardware news to report. Let's get to it.

Cisco and Wi-Fi 6

Cisco (CSCO) could see a nice revenue boost in the near future on account of a development known as Wi-Fi 6. It's not 5G, and it's not the next iteration after 5G, but simply an improved and fast internet connection, which Cisco's equipment could power. "While 5G is getting a lot of headlines, Wi-Fi 6 should also have a big impact," wrote Susquehanna Financial analyst Mehdi Hosseini in a note out Sunday evening. "Cisco is investing in the campus infrastructure upgrade cycle. It has launched a series of next generation switches, access points and controllers."

Hosseini said Wi-Fi 6 could have 400% more capacity than current connections, and would allow internet users to connect more easily in crowded spaces such as lecture halls and stadiums. Cisco shares are up 33% this year.

Nvidia and the Trade War

Intel (INTC) had to lower guidance from $71.04 billion to $69 billion for the full year of 2019 because of data center weakness in China, which Cowen analysts said is likely to impact Nvidia as well. But while Chinese data center demand weakness is a risk for Nvidia (NVDA) , RealMoney's stock of the day, so is gaming demand in the region.

President Trump's Sunday announcement that he may impose tariffs on $200 billion worth of Chinese goods by Friday could hurt another one of Nvidia's segments: gaming. As Kevin Curran of RealMoney noted, increased tariffs on Chinese goods will likely hurt the Chinese economy more than they will the U.S since China relies so heavily on exports, especially to the U.S. Weaker end market demand in the U.S. resulting from increased tariffs will pressure revenues for Chinese companies. That impacts hiring and wages, which in turn hurts consumer spending.

Video gaming is particularly discretionary, so Nvidia's GPU sales could get hurt if the trade war worsens. GPU sales account for roughly half of Nvidia's revenue. Nvidia's stock is up 32% this year.

Related.Nvidia's Gaming Segment Is Greatest Risk if Trade Tensions Escalate

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