Market News #31 - 24-28 Jan. | Microsoft, Intel, SAP: Should You Invest In Tech This Week? 🗞

The tech sector just had its worst start to a year since 2016, largely due to runaway inflation around the world. So watch out, tech stocks are particularly volatile right now! As you know, however, the big US and European tech companies have the ability to surprise the markets. Several of them will publish their quarterly results in the coming days, which could present a unique opportunity for you and your portfolio.

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Software companies are on cloud nine :computer:

Did you know that revenue for the cloud sector (all companies combined) reached €2.61 billion in the fourth quarter of 2021? The dizzying data says a lot about the growth prospects of large software companies, most of which now specialise in cloud services or related areas.

This is particularly the case for Microsoft, which will reveal its figures on Tuesday, January 25th. First, an important piece of news: Microsoft has just acquired the gaming giant Activision Blizzard for $68.7 billion. It’s a huge moment which puts Microsoft in the top three most powerful video game companies (it already owns Xbox and Minecraft).

This latest news makes the upcoming earnings call even more exciting for Microsoft, which has a history of beating analyst expectations. Earnings per share is estimated at $2.39, with revenue expected to grow by around 14% over the next year, and the year after.

Next up, if you work in a team, you’ve probably used Atlassian’s cloud collaboration software. The company will report its figures on Thursday, January 27th and it will likely be boosted by increased remote working through the Omicron wave.

Lastly, we’ll get figures for SAP, a German cloud software company. We’re expecting a 28% rise in revenue for the fourth quarter, so keep your eye on the results this Thursday, January 27th.

The ongoing nightmare for chip makers :chipmunk:

We’re experiencing supply chain problems all around the world, but it’s particularly bad for semiconductor companies (those that make microchips and electronics for your smartphone and computer).

And the problem isn’t going away! American manufacturers worry that China’s zero-tolerance policy towards the coronavirus will put a brake on supply chains and the movement of goods again this year.

Despite everything, these companies still have reassuring prospects because semiconductors are essential to the manufacture of products on a day-to-day basis. Some have been investing in their own manufacturing process so they’re less affected by the supply chain problems. This is Intel’s strategy, for example. The company has injected up to $28 billion in its own factories to improve the manufacturing process.

Intel will release its results on Wednesday, January 26th. The company is expected to post earnings-per-share of $0.90, which is down 41% from the previous quarter. Revenue is expected to come in at $18.3 billion, a decrease of 8.38% compared to last quarter.

Back here in Europe, keep your eye on French chip company STMicroelectronics, which will present its profits on Thursday, January 27th. The group just ended 2021 with a record turnover of $12.76 billion.

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The shift towards ‘car tech’ with Tesla :oncoming_automobile:

If you follow financial news, you’ll know that Tesla makes a new announcement almost every day! CEO Elon Musk said he will update everyone on the famous Cybertruck on the company’s upcoming earnings call, scheduled for Wednesday, January 26th.

Speaking of Tesla, the company said it delivered 308,600 cars in the fourth quarter, closing in on one million deliveries for the full year 2021. This data could translate into strong revenue at the next earnings event.

What to expect from Apple earnings? :money_with_wings:

Apple will reveal its earnings on Thursday, January 27th. Good news, we wrote a full analysis on Apple’s latest quarter. Read it here.

Economic and earnings calendar :calendar:

Monday – Manufacturing and services PMI estimates for France, Germany, eurozone and United Kingdom (January). Quarterly figures from **IBM**, Halliburton, Philips.

Tuesday – Ifo Business Climate Index in Germany. Quarterly figures from Microsoft, Verizon, General Electric, Johnson & Johnson.

Wednesday – Unemployment rate in France (December). Industrial profits in China (December). US Fed interest rate decision. Quarterly figures from Tesla, Intel, Abbott, Boeing, Aspen, Soitec, Levi Strauss, Kimberly-Clark.

Thursday – Unemployment rate in Spain (Q3 of 2021) and in the United States (weekly). Quarterly figures from Apple, McDonald’s, Mastercard, Visa, Starbucks, SAP, Atlassian, STMicroelectronics, Deutsche Bank.

Friday – Business climate in the Netherlands (January). GDP rate in France, Spain and Austria (Q4 of 2021). Unemployment rate in Germany (December). Economic sentiment and inflation estimates in the eurozone. Quarterly figures from Chevron, Caterpillar, Colgate-Palmolive.

Interesting to read :books:

BUX Broadcast :netherlands:

BUX Broadcast #39 | NIEUW! Crypto en fractionele aandelen op BUX Zero!

BUX Broadcast :de:

BUX Börsenausblick #30 | Neues Jahr, neue Features!

Do you think that it was a great move for Microsoft to acquire Activision? :thinking:

  • Yes
  • No

0 voters

We’ll be back next week with another edition of Market News. In the meantime, have a great week on the markets! :wave:t4:

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

2 Likes

It was a great move by microsoft to acquire Activision, since it’s got the dubious honor to be in the news a lot lately because of all kinds of scandals and the current CEO is, shall we say, special.
Microsoft has the backbone and clout to straighten that ship around.

Additionally, I’ll be picking up some Microsoft before the earnings Tomorrow. It’s pretty much on the fair value line (and it very rarely dips below it), so it’s a good time to make a move.

5 Likes

I agree, one of the best buys in history in my opinion. I still believe strongly in the long term value of Act/blizs/kings IP’s. Microsoft instantly made their whole gaming sector a lot more attractive, especially if they decide to put some of the games on their game pass.

I also want to add that I think Microsoft is revolutionizing how people pay for their games. I think subscription model will be the new normal in ± 5 years. To me it feels like the logical next step in gaming, just like Netflix revolutionized the way we payed for movies.

2 Likes

I do actually agree on that with a sidenote that I think it might be subscription where you still download the game to play it, not a streaming one. Lots of countries around the world simply don’t have the internet infrastructure to stream reliably.

That being said I hope they keep games available for outright buying as I love to fish for games during the STEAM sales :smiley:

2 Likes

Yes 100% Agreed. I personally also like the buy my games still (especially on steam sales).

But then again, (I feel like a Boomer for saying this) I also still have blu rays! :joy: I think it will just become like the movie market, where you can either buy Diablo/ Call of Duty / Overwatch / etc for 60 euro’s, or you can play it for a 15 euro subscription. And eventually the massa will levitate towards subbing.

As for streaming. I do think it is the future for gaming. infrastructures will get better (just like Netflix’s streaming is pretty solid in most countrys nowadays, unlike 10 years ago). Especially if there is more money thrown into it by massive companies like Microsoft and Alphabet.

And from what I hear from my brother, Apparently Streaming already works really well on the google platform, for most games (not yet the quick reaction time games, but for RPGS you cant distinguish much from downloading vs streaming). Its just sad their release a few years ago was a abysmal disaster, but it has improved A LOT in the last few years from what I’ve heard.

I was really skeptical about it 5 years ago, but it is starting to deliver slowly but surely. And I think streaming just mixes really well with a ‘subscription model’. You get so many games, and it just lends itself for trying out different games. And what easier way to try out a game for a few hours, then to just open it without the hassle of downloading it.

So to bring it all back to Microsoft, Its a good thing they are looking into all those new ways of playing / paying for games. And I see huge potential in the coming 5-10 years for Microsoft gaming’s division.

1 Like