Why Microsoft and Intel are Leading the Dow Today

The announcement of the PC market's death may have been a bit premature, which is why Microsoft and Intel top the Dow's returns today.

Jan 10, 2014 at 2:00PM


PC systems like this batch of Dell hardware aren't dying as fast as you might have thought.

The two strongest performers on the Dow Jones Industrial Average (DJINDICES:^DJI) today come from the tech sector. Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) shrugged off the morning's disappointing jobs report to both add about 1% to their share prices. The Dow itself had slumped more than 0.2% just before 2 p.m. EST, and the third-strongest gainer, Coca-Cola, delivered only a 0.7% jump.

This time, there's a perfectly reasonable catalyst behind Intel's and Microsoft's Dow-beating performances. Independent market researchers IDC and Gartner just released their estimates of worldwide personal computer shipments in the holiday quarter, and they weren't as bad as investors had feared.

Gartner saw about 82.6 million PC systems sold in the fourth quarter of 2013, while IDC stopped at 82.2 million. The differences come from each service estimating some numbers in cases where the system builders' fourth-quarter reports haven't hit the newswires yet.

That said, both firms agree that the global PC market shrank no more than 7% year over year. Gartner said that some markets, including the crucial U.S. reports, may have bottomed out by now. Tablets keep stealing market share in emerging markets, but American consumers and corporations might have now reached their ideal tablet-to-PC balance.

IDC and Gartner also agreed that Hewlett-Packard (NYSE:HPQ) is losing market share in America to hungrier vendors like Lenovo and the privatized Dell. This should come as no surprise, given HP's refocus on software and services under CEO Meg Whitman, but HP shares still tumbled 0.7% on the market reports. I'm not sure that's entirely fair, but then HP investors have plenty of reason to be nervous these days. Turnarounds are always tricky, and HP's is thornier than most.

This qualifies as relatively good news for the PC industry as a whole, as the fourth-quarter declines were smaller than the full-year percentage drops. The streak of seven consecutive quarters with negative growth may be coming to a close, leaving the PC market stable enough to support Intel and Microsoft at current share prices.

Here's another way to play the computing market -- no hardware required!
There are few things that Microsoft founder and chairman Bill Gates fears. Cloud computing is one of them. It's a radical shift in technology that has early investors getting filthy rich, and we want you to join them. That's why we are highlighting three companies that could make investors like you rich. You've likely only heard of one of them, so be sure to click here to watch this shocking video presentation!

Fool contributor Anders Bylund owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information