Wed, Aug. 26, 4:21 PM
- The Nasdaq has closed its latest ultra-volatile day up 4.2%. Chip stocks, hit hard in recent weeks amid China/inventory concerns, were among the standouts (SOXX +5%) during the rally: Big gainers included Nvidia (NVDA +7.5%), Skyworks (SWKS +6.9%), Qorvo (QRVO +5.9%), Xilinx (XLNX +6.3%), Analog Devices (ADI +7.1%), Linear (LLTC +6.1%), SanDisk (SNDK +7.4%), ON Semi (ON +6.2%), and Cavium (CAVM +5.6%).
- Cybersecurity plays and various other enterprise tech names also did well. Standouts included HP (HPQ +5.5%), Palo Alto Networks (PANW +6%), Rackspace (RAX +9.8%), Red Hat (RHT +5.9%), KEYW (KEYW +8.1%), Brocade (BRCD +5.6%), ShoreTel (SHOR +5.7%), Violin Memory (VMEM +14.7%), and Rapid7 (RPD +7.2%).
- In addition to HP, tech large-caps turning in big gains included Apple (AAPL +5.7%) Microsoft (MSFT +5.5%), Google (GOOG +7.7%), and Intel (INTC +5.5%). Google benefited from a Goldman upgrade.
- KEYW announced a CEO change yesterday afternoon. HP and Brocade are adding to last week's post-earnings gains. Skyworks/Qorvo peer Avago has posted an FQ3 beat after the close.
Wed, Aug. 26, 11:37 AM
- A little under a month after the OS formally launched, 75M+ devices are running Windows 10 (MSFT +1.8%), VP Yusuf Mehdi discloses through a tweetsorm. On July 31, Mehdi stated Win. 10 downloads had topped 14M over the first 24 hours.
- Also disclosed: Over 122 years of gameplay have been streamed from the Xbox One to Win. 10 systems, and the Windows Store has seen 6x as many downloads per Win. 10 device as it has for Win. 8 devices. The latter likely has a lot to do with the store's integration with the search bar found next to Win. 10's Start menu, and the ability to run Metro-style apps downloaded from the store on the traditional desktop UI.
- Microsoft has generally seen positive reviews for Win. 10. However, with the OS provided as a free upgrade to Win. 7/8 users, expectations for its impact on PC sales have been subdued. IDC forecast today global PC shipments will drop 8.7% in 2015 to 281.6M - an 11.8% drop was estimated for Q2 - and decline further in 2016 before stabilizing in 2017.
Mon, Aug. 24, 8:03 AM
- Tech stocks in the U.S. are sharply lower in early action after the sector fell just as hard as broad market averages in China and Japan. Tech heavyweights aren't getting spared amid the carnage.
- Google (NASDAQ:GOOG) -4.1% premarket to $587.31.
- Apple (NASDAQ:AAPL) -5.1% to $100.38.
- Microsoft (NASDAQ:MSFT) -3.9% to $41.41.
- Facebook (NASDAQ:FB) -3.4% to $83.05.
- Yahoo (NASDAQ:YHOO) -6.6% to $30.75 and Alibaba (NYSE:BABA) is down 8.7% to $62.26 as concerns over growth in China mount.
- The Nasdaq 100 futures contract is off 4.8%.
- Related ETFs: XLK, VGT, HACK, SOXL, FDN, GGT, TECL, USD, SMH, IYW, TDIV, IYZ, SOXX, ROM, XSD, VOX, SOXS, FTEC, TECS, RYT, PBS, PSI, IGV, QTEC, IGM, FXL, SSG, PSCT, IGN, MTK, REW, XTL, PXQ, FCOM, XSW, PSJ, PTF, LTL, TLL
Thu, Aug. 20, 7:08 PM
- Microsoft (NASDAQ:MSFT) accuses InterDigital (NASDAQ:IDCC) of violating a pledge to license its 3G/4G patents on FRAND terms, and claims the company has "engaged in an unlawful scheme to acquire and exploit monopoly power over technology necessary for companies to make 3G and 4G cellular devices."
- Microsoft has frequently sparred in court with InterDigital, as did Nokia before Microsoft bought the company's phone unit.
- In April, an ITC administrative law judge Microsoft phones infringe two InterDigital patents, and that InterDigital had fulfilled its obligation to offer to license the patents under reasonable terms. A commission ruling is expected on Aug. 28.
- IDCC -1.1% after hours to $47.85.
Thu, Aug. 13, 9:35 AM
- "Even with muted expectations for Windows...we believe positive company-wide gross profit dynamics coupled with expense control should enable gross profit dollars to grow faster than operating expenses in coming years," writes Stifel's Brad Reback, upgrading Microsoft (MSFT +0.3%) to Buy after downgrading to Hold exactly two years ago (shortly before Steve Ballmer announced he's stepping down).
- Reback adds he's "increasingly confident in continued growth in the Commercial division," and thinks Microsoft's Devices & Consumer ops will turn profitable following major Nokia division job cuts. 15% dividend hikes are expected in FY16 (ends June '16) and FY17.
- Previously: Barron's makes bull case for Microsoft
Thu, Aug. 6, 2:15 PM
- P-E firms Permira has closed its $5.3B ($48.75/share) acquisition of Informatica (INFA +0.4%), a deal first announced on April 7. Sohaib Abbasi will step down as Informatica's CEO, but remain chairman.
- Along with the deal's closing, Informatica has announced Microsoft (NASDAQ:MSFT) and Salesforce.com (NYSE:CRM) have become "strategic investors," taking stakes of undisclosed sizes in the data warehousing software vendor.
Mon, Aug. 3, 12:37 PM
- Suggesting Microsoft (MSFT +0.2%) will take a gradual approach to commercializing HoloLens (echoes of Google Glass?), Satya Nadella tells the BBC the first version of his company's augmented reality headset will ship "within the next year," and be aimed at developers and enterprises.
- Nadella: "We will have developer versions of it first, and then it'll be more commercial uses cases, and it'll evolve ... This is a five-year journey, but we're looking forward to getting a v1 out, which is more around developers and enterprises. It's in the Windows 10 timeframe, which means that it is within the next year." (video)
- Nonetheless, he reiterates HoloLens will ultimately target both consumers and businesses. "In general Microsoft's approach will be always this dual-use focus, or this multi-focus. What we can uniquely do is bridge consumer to enterprise ... In the HoloLens case, when I look at the interest, it's amazing how many are in hospitals, healthcare, retail. That's where I'm seeing the interest and we'll definitely go after it."
- Still no word on pricing. Nadella previously stated Microsoft plans to let 3rd-party OEMs create headsets based on HoloLens' underlying Windows Holographic platform. A HoloLens version of Minecraft is in development.
- Previously: Microsoft reportedly investing $100M in Uber
Fri, Jul. 31, 2:59 PM
- More than two months after the WSJ reported UBER is looking to raise $1.5B-$2B at a potential $50B valuation, the car-hailing giant has closed a ~$1B round valuing it at almost $51B - more than Netflix, GM, FedEx, and many other S&P 500 companies.
- The WSJ reports Microsoft (MSFT - recently sold Bing mapping/image-collection assets to Uber) is an investor in the latest round, along with Indian media conglomerate Bennett Coleman & Co. The new funds could help pay for big upcoming investments in China and India.
- Update: Bloomberg reports Microsoft is holding talks to invest in Uber at a $50B valuation, but hasn't yet made a decision.
- Update 2: Bloomberg has updated its story to state Microsoft has agreed to invest $100M in Uber at a ~$50B valuation.
Fri, Jul. 31, 12:30 PM
- Over 14M copies of Windows 10 were downloaded in the first 24 hours following its July 29 launch, Microsoft (MSFT -0.2%) exec Yusuf Mehdi discloses.
- As announced months ago, the OS is a free upgrade to Windows 7 and 8 users ... including those with pirated copies. Microsoft has said pirated copies will continue to be labeled non-genuine/unsupported, but some have apparently been converted to genuine copies.
- Reviewers generally declare Windows 10 a major improvement over the oft-criticized Windows 8, though some recommend users wait to upgrade until lingering bugs are fixed. The Verge's Tom Warren (8.8/10) likes the revamped Start menu, Cortana/search integration, and the Xbox app (allows Xbox One games to be streamed). "Everything about Windows 10 feels like a new approach for Microsoft ... I rarely touch my MacBook Air anymore..."
- Ars Technica's Peter Bright is a fan of Windows 10's notification center, Continuum feature (allows apps to have both touch and keyboard/mouse UIs), and support for touch-friendly Metro apps on the traditional Windows desktop. He calls the new Edge browser "tremendously promising" on account of its speed, stability, and streamlined UI, but adds it's "severely feature-deficient" for the time being.
- Slate's Will Oremus: "[Windows 10] is, as of today, the most versatile and forward-looking operating system in the world. That’s because it is the first to recognize and embrace the future of computing: a world in which all your devices are just different-sized screens running the same software ... Microsoft has embraced the convergence while respecting key differences between the mobile and desktop use cases"
- In tandem with the Windows 10 launch, Microsoft has rolled out touch-friendly Office Mobile apps for the OS.
Tue, Jul. 28, 2:28 AM
- Millions of computer owners will be able to download Windows 10 for free after tomorrow, marking the first time Microsoft (NASDAQ:MSFT) has given away its latest Windows version without a fee.
- While many believe the push is to keep users on board, it may also highlight a shift in the overall strategy of Microsoft, which is looking to reverse a four-year slide in PC sales.
- The software giant seems to now be moving away from making money just once - when it sells a fresh version of Windows - to generating long-term revenue by selling apps, Web-search ads and other add-ons.
Mon, Jul. 27, 6:57 PM
- Some of the biggest and best known U.S. businesses join the Obama administration in trying to build momentum for a deal at the climate change summit in Paris later this year.
- A dozen publicly traded companies - AA, AAPL, MSFT, BAC, BRK.B, KO, GM, GS, GOOG, PEP, UPS and WMT - committed to support a “strong" outcome in Paris, and made new pledges to take a variety of steps to tackle climate change.
- For example, Alcoa says it will reduce absolute greenhouse gas emissions in the U.S. by 50% by 2025, and BRK plans to retire 75% of its coal-fueled generating capacity in Nevada by 2019.
- In addition to company-specific goals, the White House says today's announcements total at least $140B in new low-carbon investment and more than 1,600 MW of new renewable energy.
Sun, Jul. 26, 4:30 PM
- Adobe's success in migrating its on-premise software base to cloud subscriptions - and the higher multiples afforded the company in response - could be a sign of things to come for Microsoft (NASDAQ:MSFT), argues Barron's in a bullish column that follows the software giant's FQ4 report and related selloff. Adobe, like Microsoft, was prodded to aggressively embrace cloud subscriptions by activist ValueAct Capital.
- Barron's adds Microsoft has a 2.7% dividend yield and trades at less than 16x trailing free cash flow vs. an S&P 500 average of more than 20. "A rise to $55 a share over the next year would leave Microsoft at 18 times trailing free cash flow, about where consumer staple heavyweight General Mills trades now." Of note: A shift to cloud subscriptions leads near-term earnings to be depressed relative to free cash flow, since subscription revenue is recognized just a quarter at a time (unlike up-front license payments).
- The paper also downplays concerns about weak Windows/PC sales, citing an RBC estimate that Windows now accounts for only ~10% of Microsoft's value. It gives a thumbs-up to Microsoft's Apple-like decision to make Windows 10 (due in 3 days) a free upgrade for Win. 7/8 PCs, and to deliver more frequent updates.
- Microsoft earnings coverage
Wed, Jul. 22, 3:07 PM
- Microsoft (NASDAQ:MSFT) hasn't seen any upgrades/downgrades after beating FQ4 estimates, reporting strong cloud growth and major Windows/traditional Office declines, and once more providing conservative guidance. A handful of firms have tweaked their targets.
- Bernstein's Mark Moerdler (Outperform), among Microsoft's defenders, notes the commercial cloud annual run rate ($8B) rose 27% Q/Q, and that cloud margins also improved. "We estimate that the Gross Margin for each incremental dollar of revenue, given the current mix of SaaS, PaaS, and IaaS is at a minimum~70%, if not greater, with long term SaaS margins of 86%+ and Azure margins equivalent to Amazon’s at similar scale."
- Credit Suisse's Philip Winslow (Outperform): "We believe Microsoft can return to double-digit EPS growth by (1) continued rationalization of its cost structure, (2) further divestitures/exits of non-core businesses, (3) optimization of its capital structure, (4) stabilization in Windows pricing, and (5) an accelerated shift to Office 365 ... Furthermore, we believe that Microsoft Azure will emerge as the clear #2 market share player in public IaaS [behind Amazon] and will arise as the leader in public PaaS.”
- Cowen's Tim Arcuri notes Microsoft's Devices & Consumer licensing guidance (covers Windows OEM and traditional consumer Office licensing, as well as Android royalties) implies ~9.4% Q/Q growth, which in turn points to a healthy (Windows 10-driven) rebound in PC demand. D&C licensing was down 34% Y/Y in FQ4 to $1.7B, thanks to Windows/Office declines and the end of Nokia payments.
- Raymond James' Michael Turtis (Market Perform) is worried about slumping commercial on-premise software sales. "Commercial license $10,451 million (-7%) missed consensus $10,550 million (-6%), guidance $10.5-10.6 billion on both Office and Server weakness, with Server decelerating to 5% CC from F3Q’s +13% ... Commercial license billings declined 12% y/y, below revenue decline of -7%, though some of this could be transition to cloud ... We reduced our [FY16] estimates across product categories given the broader slow down and took down our Server product estimates given persistent forex impact and, possibly, the first signs of broader cannibalization of Server by Azure cloud."
- Prior Microsoft coverage, CC transcript
Tue, Jul. 21, 7:38 PM
- Microsoft (NASDAQ:MSFT) guides on its FQ4 CC for its various reporting segments to collectively see FQ1 revenue of $20.7B-$21.3B, below a $22.8B consensus. The company has been guiding cautiously for several quarters.
- Forex is expected to have a 5% impact on FQ1 and FQ2 sales growth. Microsoft promises "Windows 10 momentum" will provide a lift during the second half of FY16 (ends June '16), and that Bing (responsible for major losses in past years) will turn profitable during the year. In the wake of the company's latest job cut announcement, FY16 operating expense guidance has been cut to $32.1B-$32.4B. The tax rate is expected to be at 24% (+/- 1%).
- Ahead of the job cuts and the related narrowing of Microsoft's phone efforts, phone revenue fell 38% Y/Y to $1.23B (feature phone decline), with a negative gross margin. Lumia units rose 10% to 8.4M, but Lumia revenue fell due to a lower ASP.
- Also: 1) Though revenue fell 5% Y/Y, the unearned revenue balance rose 1% Y/Y to $25.3B, and the contracted but not billed balance rose by ~$500M to $24.5B. 2) Office 365 consumer subs rose by nearly 3M Q/Q to 15.2M; traditional Office consumer revenue fell 42%. 3) Xbox shipments rose 30% to 1.4M. 4) Azure revenue and compute usage rose by triple digits Y/Y, and enterprise mobility management (EMM) software customers rose by nearly 90% to 17K+. 5) FQ4 capex totaled $1.7B.
- Microsoft is down to $45.38 in AH trading, maintaining the losses seen after the FQ4 report was published.
- FQ4 results, details, guidance (.ppt), earnings slides (.ppt)
Tue, Jul. 21, 4:26 PM
- Thanks to weak PC sales and declining Nokia-unit phone shipments, Microsoft's (NASDAQ:MSFT) Devices & Consumer revenue fell 13% Y/Y in FQ4 to $8.7B. Commercial revenue rose fractionally to $13.5B, with cloud services and server software growth offsetting Windows and (on-premise) Office declines. Forex had a 3% impact on total revenue growth.
- Windows OEM revenue fell 22% Y/Y, and Windows volume licensing revenue fell 8%. Surface revenue +117% to $888M; Xbox revenue +27; search ads +21%.
- Server products/services +4% Y/Y; commercial cloud (Office 365/Azure/Dynamics Online) +88%; Office Commercial -4%. Commercial cloud now on an $8B/year run rate.
- Thanks to job cuts and forex, R&D/SG&A spend (non-GAAP) fell 9% to $8.33B. $4.3B was spent on buybacks.
- Microsoft has dropped to $45.74 AH. CC at 5:30PM ET (webcast), guidance will be provided.
- FQ1 results, PR
Tue, Jul. 21, 4:07 PM
MSFT vs. ETF Alternatives
Other News & PR