Tag Archives: intc

Intel’s Next Threat: AMD Chinese Deal May Plunder Server Market

Advanced Micro Devices ( AMD ) is making a play for Intel ’s ( INTC ) Chinese server market — and maybe “Super 7” clients Alibaba ( BABA ), Baidu ( BIDU ) and Tencent ( TCEHY ) — as the No. 1 chipmaker prepares for 12,000 layoffs, MKM analyst Ian Ing suggested Friday. Late Thursday, during AMD’s Q1 earnings call, AMD CEO Lisa Su announced a $293 million joint venture with China’s Tianjin Haiguang Advanced Technology Investment to “help gain share in the fastest-growing region of the server market.” Su might as well have shouted a battle cry. This week, Intel announced a 12,000-layoff restructuring plan, cutting about 11% of its workforce, to “intensify” investments in the Internet of Things, memory and data centers. Intel’s Q1 data center sales rose 9% year over year, vs. 7% for the company overall. AMD’s Chinese joint venture is “(the) best challenge yet to Intel’s server dominance,” MKM analyst Ian Ing wrote in a research report. Last year, Chinese officials announced a plan to curb reliance on foreign chips. Partnering in China gives AMD “access to design and IP resources that are tailored to the China market and significant local field sales and support resources to help win designs at a wide range of customers,” Ing wrote. Intel’s turn from PC reliance — 55% of its total sales in Q1 — could further boost AMD, which might scoop some PC market share, Ing wrote as he upgraded AMD stock to buy from neutral but maintained his price target of 4. For Q1, a 13-week quarter, AMD reported $832 million in sales, down 19% year over year, and a per-share loss ex items of 12 cents vs. a 13-cent loss in the year-earlier quarter. Both metrics topped the consensus of 27 analysts polled by Thomson Reuters for $818.2 million and a 13-cent per-share loss. The consensus’ Q2 sales guidance, calling for a 15% sequential hike, implies $956 million, which would be up 2%. The consensus saw $889 million, Rosenblatt Securities analyst Kinngai Chan noted in a report. AMD stock jump 52% Friday, to 3.99, a 19-month high. Intel stock fell 1%; AMD’s graphics chips rival Nvidia ( NVDA ), a Tesla Motors ( TSLA ) partner, fell a fraction.

Microsoft Stock Plummets On March-Quarter Miss, Weak Guidance

Microsoft ( MSFT ) stock tanked on Friday, slicing through its 50-day moving average, after the company missed March-quarter targets for sales and earnings and guided June-quarter sales nearly $1 billion below views. Microsoft was down nearly 7%, near 52, in midday trading on the stock market today . It ended the regular session Thursday at 55.78, within spitting distance of its all-time high of 56.85, reached on Dec. 29. IBD’s Take: How healthy is Microsoft’s stock, and how does it compare to rivals? Find out at IBD Stock Checkup Late Thursday , the Redmond, Wash., software leader said it earned 62 cents a share excluding items, flat with the year-earlier period, on sales of $22.08 billion, up 2%, for its fiscal third quarter ended March 31. Analysts polled by Thomson Reuters expected 64 cents EPS and $22.09 billion in sales. Q3 EPS would have been 66 cents without a tax adjustment. For the current quarter, Microsoft expects sales of $22.05 billion, at the midpoint of its guidance. That would be down slightly from $22.18 billion in the year-ago quarter, and it’s almost $1 billion below the $23.04 billion modeled by Wall Street. It did not give an EPS target. Microsoft’s fiscal Q3 results were in line to slightly ahead of estimates after adjusting for a higher-than-expected tax bill, Jefferies analyst John DiFucci said in a research report. But Microsoft’s fiscal Q4 guidance was below consensus in every business segment, he said. The implied EPS for Q4 was almost 10 cents below the consensus estimate of 66 cents a share, he said. DiFucci rates Microsoft stock underperform, with a price target of 40. “Management spoke of macro weakness, a topic we do not expect many companies to blame, other than those that are simply not doing well in the market, or where expectations are overly optimistic,” he said. “Given the high percentage of annuity business, we believe the business momentum is even worse that implied in the revenue shortfall predicted in guidance.” Microsoft faces meaningful risks associated with its continued dependence on the PC business and increased competition in the cloud computing market, DiFucci said. Windows PC sales continue to be weak, a situation that also hurt March-quarter results for chipmaker Intel ( INTC ). Cowen analyst Gregg Moskowitz called Microsoft’s results and guidance “uninspiring.” He reiterated his market perform rating on Microsoft stock but lowered his price target to 58 from 59. UBS analyst Brent Thill maintained his buy rating and price target of 60 on Microsoft stock. The company’s cloud-based businesses, including Azure and Office 365, continue to exhibit strong performance and Microsoft is seeing strong renewals and ARPU (average revenue per user), he said. RBC Capital Markets analyst Ross MacMillan maintained his outperform rating on Microsoft stock, but cut his price target to 61 from 63. Image provided by Shutterstock .

Proofpoint Smashes Q1 Views, Guides 2016 Up On ‘Momentum’

Proofpoint ( PFPT ) smashed Wall Street’s first-quarter expectations late Thursday, thanks in part to a $5 million billings pull-through, and boosted 2016 guidance by $5 million at the midpoint, prompting shares to rocket Friday. In early trading on the stock market today , Proofpoint stock jumped as much as 8% before paring the advance to a 2.5% gain in mid-morning trade, near 55. Shares are down more than 15% this year, but they have recovered 50% from a Feb. 8 bottom at 36.60 on concerns of a slowdown in IT spending. For Q1, Proofpoint reported $79 million in sales, up 37% year over year, and a 9-cent loss per share ex items vs. a 14-cent loss in the year-earlier quarter. Billings came in at $98.3 million, up 48%. All three metrics topped the high end of Proofpoint’s guidance. The analyst consensus, meanwhile, had modeled $76.3 million in sales and a 14-cent loss per share. During Q1, Proofpoint’s protection and advanced threat segment — which represents 71% of sales — grew 47% year over year, CFO Paul Auvil said on the late Thursday conference call. TAP (targeted attack protection) nearly doubled and accounted for half of all new add-on business, he said. Pacific Crest analyst Rob Owens called it a “sign o’ the times (as) momentum continues,” and maintained his overweight rating and 66 price target on Proofpoint stock. “Proofpoint remains in the winners’ camp relative to our bifurcation thesis, as results meaningfully outpaced expectations for the quarter,” he wrote in a research report. “Q1 was demonstrative of the multiple layers of potential upside for Proofpoint.” Current-quarter guidance for $83.5 million to $84.5 million in sales and $94 million to $96 million in billings would be up a respective 32% and 26% year over year. Proofpoint sees a per-share loss of 7-8 cents vs. a 9-cent loss in the year-earlier quarter. Billings guidance was slightly short of analyst views for $100 million, but Piper Jaffray analyst Andrew Nowinski credited that to $5 million in early renewals that typically would have been factored into Q2. Nowinski retained his overweight rating and 76 price target on Proofpoint stock. Proofpoint also bumped up its full-year guidance. Partnerships with Intel ( INTC ) and Palo Alto Networks ( PANW ) haven’t yet been factored into guidance but are contributing to the pipeline, Nowinski wrote. “They did say revenue from a number of customers is double what they spent with Intel since they bought additional products like TAP or privacy,” he wrote in a report. “This suggests the overall opportunity could be larger than initially estimated.”