Technology

Qualcomm Earnings Could Be Overshadowed by These 2 Worries

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Qualcomm has seen a recovery in its smartphone chip business, and it’s looking to keep up that momentum when it reports its fiscal fourth-quarter results on Wednesday after the close. The company also has two diversification efforts that can drive results in the future. But there are clouds hanging over the proceedings. Analysts are projecting 14% revenue growth on the year to $9.9 billion. Adjusted earnings per share is seen at $2.56, up 27%. Over the past 10 quarters, Qualcomm has beaten sales and EPS estimates eight times. The consensus estimate for first-quarter guidance is $10.6 billion in sales, and EPS of $2.86. Qualcomm’s core market is smartphone chips, which comprise 65% of total revenue in the past year. Analysts see smartphone sales at $6.1 billion, up 12% on the year, similar to last quarter. The last three quarters have shown recovery in this cyclical segment, and Wall Street expects […]

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Apple to Face First-Ever EU Fine Regarding Antitrust Rules, Sources Say, Bloomberg Reports

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Apple is set to be fined by the European Union’s antitrust regulators, making the iPhone maker the first company to be fined under the union’s new digital antitrust rules for Big Tech, Bloomberg reported, citing people familiar with the case. Watchdogs are preparing the penalty after Apple failed to allow app developers to steer users to cheaper deals and offers outside of the App Store, the report said. The European Commission could wage the fine before current EU competition commissioner Margrethe Vestager is set to leave office later this month, but there is a chance it could be pushed back to later this year, Bloomberg reported.

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Apple IPhone-Related Factors to Drive Near-Term Stock Performance, Morgan Stanley Says

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Apple (AAPL) iPhone-related factors will be the main drivers of near-term estimate revisions and stock performance, Morgan Stanley said in a note Friday. One such factor is the Apple Intelligence phase 1 rollout consumer response, which Morgan Stanley believes is “too early” to evaluate now. Other factors are the timing of when iOS18.2 will be launched in December and the timing of the rollout of the iPhone SE4, Morgan Stanley said. On Apple’s fiscal Q4 results, the investment bank said they were “admittedly mixed,” with revenue lighter than Morgan Stanley’s above-consensus estimate but “still seasonally better than the last two September quarters.” Morgan Stanley maintained Apple’s overweight rating and $273 price target. Apple shares were down 1.8% in recent Friday trading.

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Apple Intelligence Hasn’t Yet Provided Expected Boost

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Apple’s newly released set of artificial-intelligence features hasn’t provided the boost some had expected for the iPhone maker, Quilter Cheviot’s Ben Barringer says in a note. The iPhone 16 disappointed users as AI capabilities aren’t proving to be overly beneficial yet as Apple Intelligence was only released on Oct. 28, Barringer notes. “Without an obvious catalyst to bring high single digit growth back, investors may be better placed in some of the other Magnificent Seven companies instead,” Barringer says. Apple shares are down 1.6% premarket at $222.29.

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AMD Stock Pressure Suggests Raised Guidance Was Largely Anticipated

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Advanced Micro Devices’ guidance was generally in-line but many were expecting more upside for the business, particularly in its data center segment, says Susquehanna Financial Group’s Christopher Rolland in a research note. The chip maker reported a sharp rise in quarterly sales on demand for its AI chips and other products for data centers. CEO Lisa Su raised her projection for AMD’s sales of AI chips this year to $5 billion from a $4.5 billion forecast in July. “While the company did raise 2024 MI300 revenue guidance to >$5B, we believe the negative stock reaction suggests the $500M raise was largely anticipated by investors,” says Rolland. AMD sinks 10% to $149.71.

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Alphabet’s 3Q Bolsters Optimism Around Google’s Long-Term Prospects

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Alphabet’s latest results give analysts at Wedbush confidence that the parent company of Google is set to manage a period of transition. Alphabet’s 3Q results were powered by strong performance in its cloud-computing division, while Google’s search engine and YouTube video platform both reported slowing revenue growth for a second straight quarter. The analysts note Google’s integration of Gemini into its core services is starting to result in tangible results across consumer and enterprise products. “We continue to believe the structural risks to Google’s search dominance are overblown, and we are optimistic on the longer-term prospects of the search business as Google manages through this period of transition,” say the analysts, who raise their price target to $210 from $205. Shares rise 6.6% to $180.92 in early trading.

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Microsoft Poised for Growth Despite Short-Term Pressures, AI Challenges, Morgan Stanley Says

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Microsoft (MSFT) faces negative investor sentiment due to concerns about gross margins, capital expenditures, artificial intelligence monetization, and its OpenAI relationship, Morgan Stanley said in an earnings preview on Thursday. But despite short-term supply constraints in AI infrastructure, Microsoft’s ability to deliver steady core Azure consumption puts it in a positive setup for outperformance in the upcoming quarters, the analysts said. “We expect to see modest upside in F1Q outperformance, but see the larger lever for stock outperformance being greater investor confidence in the F2H Azure acceleration,” Morgan Stanley said. The firm said investors have reduced their expectations for Microsoft 365 Copilot due to limited financial visibility and competitive pressures. However, it is showing positive signs of adoption and is viewed as a potential multi-year driver for average revenue per user expansion. Morgan Stanley expects the company’s capital expenditures to remain high as they are aligned with future growth in

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ASML Lacks Positive Catalyst for Rest of 2024

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ASML Holding faces a few months without a positive share price catalyst as newsflow in the near term is unlikely to improve for the Dutch semiconductor-equipment maker, Stifel’s Juergen Wagner writes in a research note. ASML shed more than $60 billion in market value this week after the company warned the recovery for some areas of the industry could extend well into the next year.Wagner says near-term visibility is more limited at the moment, likely prompting a change in investor sentiment more toward shorter-term newsflow. ASML shares trade 0.6% lower at 630.00 euros.

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ASML Cut to Next-Year Guidance Makes 2026 Outlook Key for Shares

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ASML Holding’s cut to its expectations for next year on weak order intake means the company’s trajectory from 2025 into 2026 and beyond is now key for its shares, Citi analysts say in a research note. The Dutch company, which supplies semiconductor-manufacturing machinery to chip makers, expects between 30 billion and 35 billion euros in sales next year, below a previous forecast of up to 40 billion euros. The company had reiterated as recently as September that the low end of its 2025 sales guidance was conservative despite negative newsflow over the summer, including cuts to spending plans by key customer Intel, Citi says. “Estimates had been declining for 2025, including our own, but consensus at 36 billion euros is now high,” the analysts say.

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Microsoft and These Other Stocks Are the Way to Play AI Now, Says Goldman Sachs

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So-called “platform” stocks, such as Microsoft and Snowflake, are currently the most attractive part of the AI sector as the sector continues to evolve, according to Goldman Sachs. In a recent note, a team of Goldman analysts led by Ryan Hammond revisited its “four phases of AI” investment hypothesis and examined which stocks would offer the best bet in coming months. To recap, Goldman considers Nvidia (NVDA), as the “clearest near-term AI beneficiary,” to encapsulate Phase 1. Phase 2 comprises firms focused on AI infrastructure, including semiconductor firms, cloud providers, data center REITs, hardware and equipment companies, security software stocks and utilities companies, according to Goldman, which gave this cohort the mnemonic GSCBAIP2. Phase 3 includes companies with the potential to monetize AI – primarily via software and IT services (GSCBAIP3). Phase 4 includes companies with the biggest potential earnings boost because of the productivity gains it is hoped AI

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Adobe Inc. (ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership

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Adobe Inc. (NASDAQ:ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership October 14, 2024 5:00 PM ET Company Participants Jonathan Vaas – VP, IR Shantanu Narayen – Chair & CEO David Wadhwani – President, Digital Media Business Anil Chakravarthy – President, Digital Experience Business Daniel Durn – EVP & CFO Scott Belsky – Chief Strategy Officer & EVP, Design & Emerging Products Steve Day – Head of IR Conference Call Participants Jay Vleeschhouwer – Griffin Securities Michael Turrin – Wells Fargo Saket Kalia – Barclays Karl Keirstead – UBS Mark Murphy – JPMorgan Gregg Moskowitz – Mizuho Securities Jackson Ader – KeyBanc Capital Markets Stefan Slowinski – BNP Paribas Jonathan Vaas Welcome, everyone to Adobe MAX 2024 Investor Update. It’s great to see so many friendly faces here, from the investment community, some of our Board members in the back. Welcome. Thanks for coming. Just curious, show of hands, how

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IBM Poised for ‘Solid’ Q3 Results Amid Persistent GenAI Consulting Strength, RBC Says

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International Business Machines (IBM) is expected to post “solid” Q3 results amid continued strength in generative artificial intelligence consulting as well as free cash flow performance, RBC Capital Markets said Thursday. The technology giant is scheduled to report Q3 results Oct. 23. RBC expects adjusted earnings of $2.24 per share on revenue of about $15.08 billion. “Peer results would suggest continued strength in consulting, while software traction likely remains the larger catalyst for sentiment improvement,” RBC analysts, including Matthew Swanson, said in a note to clients. “We continue to look for greater software traction, particularly from Red Hat, which management expects to reaccelerate in the 2H, as 1H strength was largely driven by better-than-expected infrastructure performance late in the refresh cycle as well as GenAI supporting consulting, while ‘discretionary spend’ saw headwinds,” the analysts said. RBC raised its price target on the IBM stock to $250 from $211 while maintaining

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