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Apple, AMD ring in 2020 as Wall Street top picks; streaming wars intensify

Shares in Apple Inc. and Advanced Micro Devices Inc. surged into the new year after a tech-focused venture capital firm cheered the companies as top picks for 2020. Elsewhere, Netflix Inc. and The Walt Disney Co. moved in opposite directions amid intensifying streaming competition.

Gene Munster, managing partner at Loup Ventures, predicted Apple will be the top-performing stock this year in the so-called FAANG grouping, which includes Facebook Inc., Apple, Amazon.com Inc., Netflix and Alphabet Inc.'s Google LLC. The analyst cited strong demand for the Apple Watch and investor anticipation for the release of a 5G-enabled iPhone in the fall as primary drivers for the company this year. The Apple Watch should account for 5.5% of Apple's overall revenue during 2020, with the potential to reach 12% by 2025 as consumer adoption becomes more widespread, Munster said.

Regarding 5G, Munster expects Apple to release two new iPhones featuring 5G connectivity at its 2020 fall hardware refresh event. Apple was noticeably missing from the 5G race in 2019 due in part to the company's ongoing legal battle with QUALCOMM Inc., over patents and licensing, which was settled in April. Qualcomm became the sole U.S.-based supplier of 5G modem chips after Intel Corp. exited the 5G smartphone business earlier this year.

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"Long-term, we believe the 5G cycle can deliver two years of 10% iPhone revenue growth, compared to our expectation of iPhone revenue essentially flat in calendar year 2020," Munster wrote in a research note.

Around midday Jan. 3, Apple stock was trading at $299.49 apiece, up 3.34% from its Dec. 27, 2019, close.

Turning to AMD, Nomura Instinet analyst David Wong this week upped his price target on the semiconductor's shares to $58 from $40, writing that AMD has demonstrated a "consistent execution" of on-time product rollouts and maintains a "well-stocked road map" of upcoming product launches in 2020. The company is among those scheduled to appear at CES 2020, the Consumer Technology Association's annual technology and media trade show, which kicks off Jan. 7.

"We think that AMD will continue to gain microprocessor market share in desktop, notebook and server processors through 2020, and we will be looking to see if AMD begins to gain GPU market share in the year," Wong wrote in a report.

AMD shares were trading at $48.54 midday Jan. 3, up 5.11% for the week.

Turning to streaming, Disney's stock inched upward, while Netflix shares slumped after an analyst at Rosenblatt Securities predicted Disney's booming streaming offering could steal subscribers from Netflix.

Rosenblatt Securities analyst Bernie McTernan in a research note obtained by CNBC predicted that Disney+ will attract 25 million users by the end of the first quarter 2020, up from his previous estimate of 21 million subscribers.

Based on McTernan's research, 29% of Disney+ subscribers surveyed indicated they unsubscribed from another streaming service as a result of subscribing to Disney+, and 9% indicated that they unsubscribed from Netflix, he said.

Disney+ launched in November 2019 for $6.99 per month. Netflix charges monthly streaming fees ranging from $8.99 to $15.99. Disney+ offers some 500 movies, including the company's classic vault titles, as well as content from the Star Wars and Marvel franchises and 7,500 library TV episodes.

Around 12:30 p.m. ET on Jan. 3, Disney shares were trading at $147.07, up 0.91% for the week. Netflix stock, meanwhile, was trading at $328 per share, down 0.33%.