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The Zacks Analyst Blog Highlights: Apple, Intel, VMware, Microsoft, Google and Yahoo - Press Releases

For Immediate Release

Chicago, IL - August 11, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Apple ( AAPL ), Intel ( INTC ), VMware ( VMW ), Microsoft ( MSFT ), Google ( GOOGL ) and Yahoo ( YHOO ).

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Here are highlights from Monday's Analyst Blog:

Tech Earnings Roundup: Apple Falls, Intel Launches Skylake

Apple ( AAPL ) shares sank again last week driven by growth concerns, Intel ( INTC ) announced a couple of chips based on the Skylake architecture and VMware ( VMW ) -EMC combination rumors continued.

BofA Downgrades Apple

Apple shares had a really bad week with negative news flow such as the BofA downgrade and denial of MVNO plans playing a role. BofA's concerns as reported in the media were a deceleration in iPhone sales, a slowdown in China, decelerating gross profit growth, declining magnitude of earnings beats, modest expectations for iPhone 6S and low likelihood of more capital return plans. As if that wasn't enough, Apple came out to uncharacteristically deny a rumor that it was pursuing MVNO plans. While some think that this was required so its carrier partners wouldn't be upset, others point to its related patents. Apple of course like other tech companies may not use every one of the technologies it patents. So what if Apple is no longer a growth company (this debate is a few years old already). It still generates a huge amount of cash, still has many new geographies and product categories to pursue and still has a huge amount of cash on the balance sheet to acquire, invest or distribute. The pessimism is hard to explain.

Intel Launches Two Skylake Chips

Intel launched two new chips based on its Skylake architecture: the Core i7-6700K and the Core i5-6600K. Since the chips will facilitate overclocking and gaming on desktops, it makes perfect sense that they were launched at the Gamescom event in Germany. They also offer 20-40% faster graphics (frame rates) and support DDR4 memory. The downside is, they will not work with older motherboards and memory, so these will also have to be replaced, making the upgrade expensive. They also don't come with cooling systems (since they allow overclocking, separate cooling systems make sense, but again increase costs). Overall, reviewers felt that performance and efficiency improvements were notable if not exceptional with systems running Sandy Bridge likely to benefit from an upgrade.

VMware Could Buy EMC

There's been a lot of talk about EMC selling itself to VMware or VMware selling itself to EMC over the past week, but whatever happens ultimately, it's essentially a juggling of the books to get a higher valuation for the combination on pressure from activist investor Elliot Management. Earlier rumors of EMC selling itself to either HP or Cisco have been shot down. If VMware is to buy EMC (makes sense since it has a higher valuation) in a downstream merger, it has to pay $50-55 billion in new shares, $30 billion of which would be used to cancel EMC's 80% stake in the company. Elliott, which managed to secure two seats on EMC's board was rooting for a sale or spin-off of VMware, which CEO Joe Tucci won't hear of. Tucci is 68, so the current lose control structure can't continue forever.

Corporate

Microsoft To Invest In Uber: Microsoft ( MSFT ) will be investing $100 million in ride hailing app maker Uber valuing the company at $50 billion. Uber is reportedly raising a billion dollars in this funding round. A portion of Microsoft's Bing mapping unit was sold to it earlier this year.

New Google Campus In Boulder: The three-building facility will likely have the capacity to house 1,500 employees at full capacity. Google ( GOOGL ) doesn't expect to open it before 2017 though and will not fill it up immediately either. It intends to operate two buildings (100,000 sq feet each) initially and build the third one as and when needed.

Legal/Regulatory

Google-Microsoft Patents Lawsuit: The appeals court upheld the verdict of a lower court that adjudged Google liable to pay $14 million to Microsoft for wrongfully and in bad faith raising the rates of standard essential patents it acquired through the Motorola acquisition. Microsoft had to spend this amount to relocate and pay legal fees.

New Technology/Products

Google Changes To YouTube Ads Buying: Google has said that the roughly 5% of advertisers using DoubleClick Ad Exchange to buy ads on YouTube will not be able to do this by the end of the year. The plan is to limit the YouTube ad buying process to DoubleClick Bid Manager (for automated buying) or Adwords (the same way that search ads are purchased). Note that Bid Manager is Google software that needs to be bought and advertisers would be forced to buy since they wouldn't be allowed to use their own software any more. But this may not be such a big deal because the most popular TrueView ads were never sold through the Exchange anyway.

$120 4G Android One Phone Enters Thailand: Google has taken its Android One initiative a step further by launching in Thailand. Thai customers will now be able to buy the iQ II, which is a 4G, dual-SIM smartphone with 1GB of RAM, 16GB of onboard storage and a Snapdragon 410 processor. The Android One initiative, which was unsuccessful when it launched last year was a move by Google to ensure regular updates and greater control of low-end smartphones in developing countries like India, Bangladesh, Nepal and Sri Lanka. Google promised a comeback. So it's perhaps not a coincidence that it has now announced an intention to roll out monthly software updates/security patches for its Nexus devices, over which it has an equal amount of control. Google needs to give Android One partners reasons to stick with it and a more secure OS could be a starting point. The company hasn't said it's expanding the monthly updating plan to Android One, but it does make sense.

M&A and Collaborations

Yahoo Buys Polyvore:Yahoo ( YHOO ) has agreed to pay $230 million for Polyvore, which is an online community of fashion enthusiasts involved in recommending and buying fashion apparel. Yahoo says it will bring on board talent, tools and relationships with over 350 retailers. The business will initially be integrated into its fashion-related digital magazine.

IBM Buys Merge Healthcare: IBM spent a billion dollars to buy Merge Healthcare, which has developed software to process, store and access medical images. IBM will use the technology to further build out Watson Health Cloud (the tech is already used in 7,500 healthcare locations across the U.S.).

Alibaba Ties With Global Apparel Brands: Alibaba (BABA) has signed exclusive deals with 20 international apparel brands to sell on Tmall. The company is also looking to strengthen ties with 160 other brands including Adidas and Gap. This focus is expected to increase credibility of its already-strong apparel category on Tmall.

Alibaba Deal Will Get Auto Sales Online: Alibaba has partnered with Chinese auto dealer China Yongda Automobiles Services Holdings Ltd. to sell cars like the Bentley and Jaguar Land Rover on Tmall. The plan is to set up 200 pickup centers within two years. The online dealership will also take care of servicing, financing, parallel imports and standardized pricing across the country.

Some Numbers

Apple Music Has 11 Million Subs: Apple told USA Today that it now has more than 11 million subscribers for Apple Music (at $9.99 for a single subscription and $14.99 for a family). Apple is offering it free during the trial period, so the 11 million subscriptions mean a relatively small percentage of iOS users for a free service. But the trial period isn't over yet, and there could also be other trial periods.

Instagram Ads Gain Momentum: A fresh report by eMarketer suggests that ad revenues on the platform will touch $600 million this year, jumping to $2.81 billion by 2017. The recently-introduced direct response button and an increased volume of ads served are expected to drive this growth. Ad recall on Instagram is very high according to its director of market operations as users like the ads they see.

Some Earnings Reports: Groupon's loss of 3 cents was a penny short of the Zacks Consensus Estimate on sales that also missed estimates. Shares were down 5.3%. Zynga beat on both top and bottom lines, with shares jumping more than 7%. Zynga also announced a $23 million settlement with shareholders (to be paid entirely by insurers) for the alleged misleading of shareholders about falling usage rates prior to its IPO. Other companies that reported last week include NVIDIA and FitBit.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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