This Week's Top Tech News: What You Need to Know

Social-network stocks have been battered, but elsewhere in Silicon Valley the tech world keeps getting bigger.

Feb 8, 2014 at 11:00AM

There was a lot to cover for tech investors last week, and this week is no different. Many of the tech world's biggest stories will continue to unfold for several weeks, but some headlines dominated the past few trading days, whether they involved unexpected earnings surprises, bold executive shakeups, or big money moves from your favorite tech companies. Let's dig into the biggest news of the past week now.

The fail whale cometh
Twitter (NYSE:TWTR) had been flying high after its IPO thanks to a combination of high Wall Street interest and strong retail investor appeal, but that was largely undone by the company's terrible user-growth numbers for the fourth quarter.


Source: Matthias Topfer via Flickr.

Not only did monthly active users barely grow from the third quarter, but Twitter's own made-up metric, "timeline views," also showed a decline from the third quarter, which means users are less engaged than they were -- in fact, they're now less engaged in the aggregate than they were in the second quarter even though there are 23 million more of them. At least Twitter's making more revenue per user, but that hasn't translated to the bottom line yet. The social network's stock lost almost a quarter of its value as a result of its earnings bomb, but there's an easy case to be made that it's still grossly overvalued.

Click here to read more about Twitter's ugly fourth quarter.

It's not a good month for social-network stocks
Another social network also reported this week, but LinkedIn (NYSE:LNKD) didn't suffer as badly as its 140-character peer despite disappointing investors in its own way. The professional social network succumbed to the curse of high expectations, as its revenue projections for the quarter now under way turned out to be weaker than what Wall Street wanted, despite being 40% higher than the year-ago quarter's result.

While LinkedIn's adjusted EPS grew slightly year over year, its GAAP net income was weaker than 2012's on both a quarterly and an annual basis. However, LinkedIn's free cash flow remains strong, and its price-to-free cash flow ratio now stands at 158 -- not exactly cheap, but not as absurdly high as its P/E ratio has been.

Click here to read more about LinkedIn's disappointing quarter.


Source: Wikimedia Commons.

An adventurous IPO
Big tech IPOs are back in vogue, as GoPro has reportedly filed "confidential" paperwork to go public this week. The maker of the popular camera for thrill-seekers -- Felix Baumgartner took a GoPro with him on a record-breaking freefall from 100 miles up last year -- is worth at least $2.25 billion based on a 2012 investment from China's Foxconn, and will likely hit the public markets at a significantly higher valuation.

Believe in yourself
The world's largest company can't find a better investment than itself. Apple (NASDAQ:AAPL) surprised the market by announcing, through the pages of The Wall Street Journal, that it had purchased about $14 billion of its own shares since releasing earnings two weeks ago. There are two ways to read this: Apple is sending the market a strong signal that there's now an effective floor on the price of its shares, or Apple can't find anything better to do with its great big gobs of money.

Fool contributor Ashraf Eassa takes a contrary position here by arguing that Apple should be concentrating on finding new avenues of growth rather than effectively plowing money back into itself. Are Apple's glory days over? This buyback might be the strongest signal yet that Apple has become a slow-and-steady value play rather than a growth superstar.

Game on!
Activision Blizzard (NASDAQ: ATVI) had one of its best days ever as a public company on Friday, after reporting market-topping results for its holiday quarter. The world's largest video-game maker is now more valuable than it's been in a quarter-century, according to numerous reports, thanks to the strength of Call of Duty: Ghosts on the next-gen consoles that made their debut this year.

Also important was news that Blizzard's flagship MMO World of Warcraft actually added subscribers on a sequential basis, which is something the company hasn't been able to say for some time. New games in the pipeline also excited investors, who chose to overlook the company's weak guidance for its in-progress first quarter in favor of taking the long view.

Tech on the rise
Energy stocks are slipping as tech companies continue to dominate the market's most-valuable rankings. On Friday, ExxonMobil briefly lost its spot as America's second most-valuable company to none other than Google (NASDAQ:GOOGL), which lost ground in late trading and now sits less than $2 billion in market cap behind the energy giant.

This is the second time ExxonMobil's lost out to a mobile superstar -- Apple's ascent to the top rung was huge news in 2012, and the iPhone maker remains comfortably in the lead after energy stocks slipped hard in 2013. Considering the rapidity of Google's rise and the weakness in ExxonMobil shares of late, it seems inevitable that Apple and Google will soon be duking it out for the top two spots. Can another tech company be far behind in the race for number three?

The next big thing in tech is here ...
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now, for just a fraction of the price of Apple stock. Click here to get the full story in this eye-opening new report.

Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.

The Motley Fool recommends and owns shares of Activision Blizzard, Apple, Google, and LinkedIn. Try any of our Foolish newsletter services free for 30 days. 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.

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