With a command from Apple AI, how do concept stocks respond? The investment logic from supply chain order cuts to stock price doubling.

In 2024, Apple is no longer the “late king.” After the official release of Apple Intelligence on June 10, Apple's stock price soared 20% to $230, far outpacing the 4% increase in the S&P 500 during the same period. Who benefits the most from this wave of AI dividends? The answer is the invisible industrial chain behind Apple.

Why can Apple concept stocks take off?

In simple terms: When Apple sneezes, suppliers catch a cold.

Apple announces the list of the top 200 global suppliers every year. Being included = good news, being excluded = bad news. The most heartbreaking historical case: when Advanced Semiconductor Engineering was removed, the stock price directly dropped by 5%; when TSMC had its orders cut by Apple in 2022, the stock price fell by 6%.

According to the latest supply chain list in April 2024, 49 companies from Taiwan have been selected. But the fluctuations are quick: Novatek was selected last year and eliminated this year; Nanya Technology has returned; Nanya and GigaDevice have been removed. What does this indicate? The supply chain ranking is reshuffled every year, and those who fall behind are eliminated.

Core Logic of Apple Concept Stocks: Order Dependency

TSMC's 1/4 orders come from Apple → stock price highly synchronized; Broadcom's 20% orders come from Apple → it rises when Apple rises. In other words, the higher the proportion of Apple orders, the more easily the stock is led by Apple's stock price.

2024 performance data at a glance:

• TSMC: +63% year-to-date (HPC business takes over as the core driver from mobile)
• Foxconn: +75%
• Quanta: +30%
• US stock Broadcom AVGO: +48%
• Qualcomm QCOM: +20%

How long can this wave of Apple concept stocks be traded?

Short-term outlook is positive for AI chip demand, but be cautious of order-cutting risks in the medium term.

TSMC's revenue in the second quarter increased by 40.1% year-on-year, but the core growth driver has shifted from iPhone to HPC (high-performance computing). ASE has received new orders for the iPhone 16 series (capacitive button SiP modules), but this also indicates that Apple is optimizing its product line — new orders do not equal an increase in order volume.

Risk Points:

1. Apple bargaining with suppliers will directly weaken performance.
2. Apple supporting the second supplier will dilute the share of existing manufacturers.
3. Chip inventory cycle fluctuations (last year the destocking pressure caused TXN revenue to fall by 15.6%, this year it has only rebounded)

How to Get On? Three Positions

① Lazy Person's Plan: Buy Semiconductor ETF

• iShares Semiconductor ETF (SOXX): The top five components include AVGO, TXN
• VanEck Semiconductor ETF (SMH): includes TSM, AVGO, ASML

② Precise Sniping: Buy Leading Stocks The first choice in the Taiwan stock market is TSMC (2330) and Hon Hai (2317); in the US stock market, it is Broadcom (AVGO) and Qualcomm (QCOM).

③ High Leverage Gambler: Using CFD Buying stocks through contracts for difference, with no fees and up to 200x leverage, but remember— the greater the leverage, the faster the losses.

Final Ramblings

Apple-related stocks are not Apple stocks. Just because Apple is pumping does not mean all Apple-related stocks will also pump, as each company's fundamentals are different. TSMC benefits from AI dividends, but Texas Instruments (TXN) is still in a de-inventory quagmire in the first half of the year. Before selecting stocks, you must clearly see: how dependent this company is on Apple and whether there are other growth points.

Currently, the outlook for Apple's supply chain is optimistic in the medium term, but don't treat concept stocks as substitutes for Apple to speculate on. That's the quickest way to incur losses.