These 2 Tech Stocks are Plunging

Shares of Yandex and Pandora are down sharply, but Microsoft is holding up even as the Dow Jones drops.

Apr 25, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) had plunged 130 points as of 11:35 a.m. EDT Friday. Dow Jones component Microsoft (NASDAQ:MSFT) was largely unchanged after reporting a solid quarter. In contrast, Pandora's (NYSE:P)disappointing forecast in its earnings report prompted a 13% sell-off, while Yandex (NASDAQ:YNDX) shares fell nearly 10% after Russian President Vladimir Putin suggested stricter regulation of the Internet in the nation.

Consumer confidence can't save the Dow
The Dow Jones' decline comes despite some strong economic data. According to the Thomson Reuters/University of Michigan consumer confidence survey, Americans are feeling better about the economy than economists expected -- a reading of 84.1 exceeded the estimate of 83. While the figure isn't the most crucial of economic data points, a better than expected reading is generally regraded as positive for the U.S. economy, and by extension the stock market. Consumers may be more confident because their economic prospects have improved, and they may be more willing to spend.


Source: Wikimedia Commons.

Microsoft posts solid quarter
Microsoft was one of the better-performing stocks in the Dow Jones on Friday. Although it wasn't rallying, it held its own, likely due to its latest earnings results. Microsoft's third-quarter report exceeded analysts' expectations on Thursday, with revenue of $20.4 billion a slight beat on the $20.39 billion estimate and earnings per share of $0.68 exceeding the $0.63 estimate.

Microsoft's cloud-based businesses were particularly strong, as enterprise subscriptions to Office 365 and use of the Azure service continue to strengthen. Consumer subscriptions to Office 365 also rose to 4.4 million.

Yandex shrinks on Putin's comments
Yandex, Russia's largest search engine, has faced sell-offs in recent months due to tensions involving the nation. Now comments from Putin appear to be weighing on shares. According to Bloomberg, Putin on Thursday argued that Russia should work to protect its information, suggesting that his government may try to take some control over Russia's Internet.

Putin singled out Yandex in his remarks, noting that the company's headquarters were located outside of Russia and that it faced some foreign regulation. He also said that his government could review Yandex's status as a media institution.

Pandora plunges on weak guidance
For its latest quarter, Pandora posted earnings and revenue that beat analyst expectations, while listener hours totaled 4.8 billion. However, Internet radio company expects to generate revenue of $213 million-$218 million in the current quarter, along with earnings per share of $0.03. Analysts had been looking for a $0.05 EPS.

Given Pandora's already aggressive valuation, it isn't surprising that shares are falling in the wake of this report. The company has struggled to remain profitable over its history, and investors are likely disapointed in this apparent further setback.

R.I.P. Internet -- 1969-2014

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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.

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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.

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