Jan. 23, 2014, 4:05 PM
Jan. 17, 2014, 11:37 AM
- Intel's (INTC -3.6%) partial blaming of weaker-than-expected Q4 server CPU division sales (revenue +8% Y/Y, but volumes only +1% Y/Y and -3% Q/Q) on a government shutdown comes across as a "bad excuse," thinks FBR.
- Though reiterating an Outperform, FBR is skeptical about Intel's long-term 15% revenue CAGR target for its server CPU division. Bernstein questioned the division's growth outlook yesterday afternoon.
- Goldman, reiterating a Sell (previous), says Intel's numbers "confirm our view that there is downside, not upside, to Intel's 2014 EPS." It's worried about both server CPU sales and a softening corporate PC upgrade cycle (driven by the Windows 7 transition) following Q1.
- JPMorgan, which upgraded Intel going into earnings, is defending the company. It's pleased with stabilizing PC demand and dismisses server concerns, given sales have historically been volatile.
- A major headwind faced by Intel's server CPU unit: Server industry revenues have been steadily declining, as demand shifts towards Web/cloud service providers with bigger economies of scale and a penchant for using cheap white-label hardware. IDC estimates total server sales fell 3.7% Y/Y in Q3, and that x86 server sales rose just 2.8%.
- Microsoft (MSFT -1.6%) and AMD (AMD -1.1%) are ticking lower following Intel's report. So are server virtualization kingpin VMware (VMW -1.9%), parent EMC (EMC -0.9%), and rival Citrix (CTXS -0.8%). Intel suggested on its CC virtualization growth is softening.
- More on Intel's Q4, CC transcript
Jan. 14, 2014, 5:42 PM
- PC industry names outperformed amid a broader tech rally, aided by a JPMorgan Intel (INTC +4%) note that argued PC demand is stabilizing, and tablet cannibalization diminishing. A number of chip stocks also rallied strongly (SOXX +2.1%).
- Also: Major hard drive suspension assembly maker Hutchinson has reported above-consensus Dec. quarter sales, while citing strong demand for 2.5" notebook drive assemblies. Seagate and Western Digital both rallied.
- JPMorgan's Christopher Danely, who upgraded Intel to Overweight, has raised his 2014 estimates soundly above consensus ahead of the chip giant's Thursday Q4 report. Danely notes Intel, Microsoft, H-P, and others have said PC demand is improving, and that Taiwan's big-4 notebook contract manufacturers collectively grew their shipments 7% Q/Q in Q4. Q1 shipments are expected to drop in-line with seasonality.
- He also points out tablet shipment growth is decelerating, and forecasts shipments will only rise 25% in 2014 (down from 53% in 2013).
- Danely's optimism contrasts with another bearish Intel note from Bernstein's Stacy Rasgon, who estimates five mobile CPU sales are needed to make up for one PC CPU sale, and doubts Intel's foundry business will move the needle.
- PC industry gainers: MSFT +2.3%. HPQ +2.6%. AMD +4.1%. NVDA +3.1%.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Previous: Goldman on Intel's Q4, Gartner/IDC's Q4 PC estimates, Intel's light 2014 guidance
Jan. 10, 2014, 9:44 AM
- Microsoft (MSFT +1.2%) has been upgraded to Overweight by Jefferies. The upgrade follows a moderate drop caused by disappointment Alan Mulally is no longer a CEO candidate.
- BlackBerry (BBRY +1.1%) has been upgraded to Sector Perform by RBC. Shares have already seen a big run-up since the company's FQ3 report.
- Baidu (BIDU +1.3%) has been upgraded to Buy by Maxim.
- Micron (MU +0.2%) has been upgraded to Buy by Jefferson Research, and started at Buy by Argus and Sterne Agee. The moves come two days after shares blasted off in response to a very strong FQ1 report (I, II).
- Splunk (SPLK -2.1%) has been cut to Equal Weight by Barclays. The downgrade shortly follows a UBS upgrade to Buy. SA Pro contributor ZNCapital recently took aim at Splunk's valuation.
- Ambarella (AMBA -1.8%) has been cut to Hold by Deutsche. Needham cut the chipmaker to Hold two days ago.
- Marvell (MRVL +1.9%) has been started at Buy by MKM.
- Qlik (QLIK +2.1%) has been upgraded to Buy by Jefferies.
Jan. 7, 2014, 1:30 PM
- Sony (SNE +0.1%) announces at CES PlayStation 4 end-user sales (i.e. sell-through) reached 4.2M as of Dec. 28. That figure suggests the PS4 soundly outsold the Xbox One (MSFT - 3M+ sales in 2013) last year, and has a good chance of surpassing Sony's target of 5M FY14 (ends March '14) sales.
- Wider distribution - the PS4 is on sale in 53 countries, the One is only available in 13 - has helped Sony's next-gen console outsell Microsoft's. But so has a lower price tag ($399 vs. $499) and the backlash to the used game restriction and Internet access requirements initially planned for the One (before Microsoft backtracked).
- Sony has also announced the launch of PlayStation Now, its anticipated cloud gaming service. The service, which leverages Gaikai's cloud gaming platform, will provide access to PS2/PS3 titles, and (since it's cloud-based) run on everything from home consoles to TV sets to handheld/mobile devices.
- Also announced: a Web-based TV service that will include VOD content and a cloud-based DVR. However, Sony is short on details for now. Intel and others have taken stab at offering such a service, only to be thwarted by content owners and incumbent pay-TV providers.
- PS4 and Xbox One CPU/GPU supplier AMD (AMD +1.6%) is rallying for the second straight day. Game developers are also higher: EA +3.2%. TTWO +3.2%. ATVI +1.6%.
Jan. 6, 2014, 3:23 PM
- Microsoft (MSFT -2%) takes on a little more water in afternoon action as a Sterne Automotive analyst says Ford's (F +0.6%) board meets on Wednesday and is likely to provide an update regarding the future of CEO Alan Mulally. In the Sterne team's opinion, Mulally isn't going anywhere.
- Previous: Doubts grow over Mulally candidacy due to his lack of technical background.
Dec. 18, 2013, 2:11 PM
- Microsoft (MSFT -1.4%) is down 3% over the last two days, as worries grow (thanks to John Thompson's recent comments) Alan Mulally (F -6.7%) won't be named Steve Ballmer's successor.
- Nomura's Rick Sherlund, who not long ago predicted Mulally would be Microsoft's next CEO, now wonders if the Bill Gates quote included in Thompson's remarks indicates "the board is rethinking the role and looking more exhaustively at candidates from the technology field."
- Moreover, if reports about Ford's board pressing Mulally to give "a definitive answer" regarding his future plans are accurate, Sherlund thinks "he might need to pull his hat out of the ring at some point soon."
- Like others on the Street, he's worried a CEO with an IT background won't be as "shareholder-friendly" as Mulally. Sherlund has previously suggested Mulally might cut costs, boost capital returns, and unload Xbox and Bing.
- However, FBR's Daniel Ives still thinks Mulally has a shot. He observes today's Ford business update contained no discussion of Mulally's plans, as many expected.
Dec. 5, 2013, 10:49 AM
- Ford (F +0.5%) director Edsel Ford II tells Bloomberg Alan Mulally, widely reported to be a top candidate (if not the frontrunner) to replace Steve Ballmer as Microsoft's (MSFT -2.4%) CEO, won't be leaving until the end of 2014.
- Microsoft shares, which have rallied more than once following a report that called Mulally a leading candidate, have spiked lower in response to Ford's comments. Ford shares have risen moderately.
Nov. 20, 2013, 3:57 PM
- Microsoft (MSFT +0.9%) is suing Acacia (ACTG -3.9%) in an NY federal court, alleging the IP licensing firm broke a 2010 agreement reached by Japanese subsidiary Access Co. to license various mobile patents.
- Microsoft's move is tied to a series of lawsuits Acacia filed against it in U.S. courts last month, in which Acacia accuses the software giant of infringing over a dozen patents.
- Previous: Acacia jumps after announcing $70M buyback
Oct. 25, 2013, 9:22 AM
Oct. 24, 2013, 4:07 PM
Oct. 15, 2013, 7:15 AM
- "We think the stage is set for a series of value creating events to unfold over the next 18 months," says analyst Ross MacMIllan, upgrading Microsoft (MSFT) to Buy and lifting his price target to $42 from $33.
- Among those events is a new operating structure with greater transparency on the best assets, or what MacMillan calls "BestCo" - the commercial segment containing key assets transitioning to the cloud. "OtherCo" is the devices and consumer segment which carry less clear value. MacMillan sees the market allowing a higher valuation to the BestCo operations.
- As for the new CEO, MacMillan sees the potential for better portfolio focus - i.e. which assets should remain as core and what should be viewed as non-core - as well as someone who sees the company's massive recurring cash flows as opportunity to give more back to shareholders.
- Shares +1% premarket.
Sep. 20, 2013, 1:36 PM
- After meeting with Google Glass (GOOG) LCOS microdisplay supplier Himax (HIMX +5.3%), Chardan's Jay Srivatsa reports Google has prompted Himax to ramp production, and thinks Glass will see a full commercial launch in Q1 2014. He adds Google might launch more than one Glass model, to cater to those needing prescription glasses.
- Srivasta believes Himax has already raised microdisplay production to 500K units/month from a prior 200K/month, and is set to produce 850K/month by the end of Q1.
- Pricing for a commercial version of Glass remains a mystery. The developer edition was sold earlier this year for $1,500. Google has said it doesn't plan to run ads on Glass, and wants to profit from hardware sales.
- Himax also told Srivasta it's in the "early stages of ramping [microdisplay] production for another company," which the analyst believes is Microsoft (MSFT -2.5%). Himax thinks the company's product could launch in mid-2014.
- Meanwhile, TechCrunch reports Microsoft might spend up to $200M to buy wearable computing patents and assets from military contractor Osterhout Design. Osterhout has worked on head-mounted displays in the past, among many other products.
- Yesterday, Oppenheimer reported Himax is seeing "significant" interest in its microdisplays from other firms in the wake of the Google deal. Himax shares are making new highs again today.
Sep. 20, 2013, 12:12 PM
- Pac Crest (Sector Perform), reviewing yesterday's analyst day: "Microsoft (MSFT -2.4%) could not answer investors’ most pressing question ... Will Microsoft’s board allow a new CEO to fundamentally restructure the company?" The firm is also disappointed there management gave no sign it will do a breakup anytime soon. Calls for a breakup have grown lately.
- Morgan Stanley (Equal Weight) points out Microsoft is guiding for FY14 capex of $6.5B, up 51% from FY13's $4.3B and above the firm's estimate of $5.6B. Microsoft attributes the spending ramp to cloud services (Azure, Xbox Live, Office 365) needs. The firm is, however, pleased with the rapid FY13 growth reported for Office 365 seats (+350%), Azure (+200%), and cloud CRM software (+80%).
- Citi (Buy) had only been expecting FY14 capex guidance of $4.8B. But it likes Microsoft's new reporting structure, arguing it will "give more clear visibility into consumer vs commercial revenue and profit contribution."
- Analyst day details: I, II, III
- Presentation slides/transcripts
Sep. 4, 2013, 4:10 PM
- Sources tell the WSJ BlackBerry (BBRY +5.9%) is " aiming to run a fast auction process that could be wrapped up by November." The report led shares to spike just before the close.
- Meanwhile, sources tell Bloomberg Microsoft (MSFT -2.2%) is "keeping an eye" on BlackBerry in the wake of the Nokia deal. Given Microsoft's commitment to Windows Phone, any interest in BlackBerry from the software giant could be related to the company's BES/network operations center assets rather than its hardware ops.
- The reports come as analysts continue to cut estimates. BlueFin Research says its checks indicate there have been major BB10 production cuts, and that BlackBerry has "amassed significant component and finished goods internal inventories, while many carriers and retailers are not restocking."
Sep. 4, 2013, 10:12 AM
- Microsoft (MSFT -1.8%) has been cut to Equal Weight by Morgan Stanley in the wake of the Nokia deal.
- Nokia (NOK +2.1%) has been received four more upgrades - from Raymond James, Jefferies, BofA/Merrill, and BNP Paribas - on top of the upgrades it received yesterday. Meanwhile, Argus has cut shares to Hold.
- Angie's List (ANGI +3.8%) has been upgraded to Outperform by RBC.
- Guidewire (GWRE -4.4%) has been cut to Sell by Citi following its FQ4 report. Though the company beat estimates, it guided on its CC for FQ1 revenue of $61.4M-$63.4M and EPS of -$0.18 to -$0.15, below a consensus of $72M and $0.03. Likewise, FY14 revenue is expected to be in a range of $328.5M-$340.5M, below a $348M consensus.
- InvenSense (INVN +1.1%) has been upgraded to Outperform by Baird.
- Concur (CNQR -1.1%) has been cut to Hold by Wunderlich.
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