Broadcom Soars, Zynga Plunges, and Microsoft Leads the Dow Higher

Broadcom soars on a major announcement, Zynga scares investors, and Microsoft slightly edges out the Dow.

Jun 8, 2014 at 9:00AM

The Dow Jones Industrial Average (DJINDICES:^DJI) closed up 207 points, or 1.24%, last week, powering to new highs. A favorable jobs report appears to have been a key driver of continued optimism in the markets, along with the bold move from the European Central Bank of cutting a key interest rate below zero to stimulate lending and economic growth. Microsoft (NASDAQ:MSFT) slightly outpaced the Dow, while chipmaker Broadcom (NASDAQ:BRCM) soared and social-game developer Zynga (NASDAQ:ZNGA) plummeted.


Microsoft's new CEO, Satya Nadella. Source: Microsoft.

Microsoft wasn't the best performer in the Dow this week, but it edged out the broader index with a weekly gain of 1.30%. Last week, the software giant saw a bit of good news when mobile device giant Apple disclosed at its annual World Wide Developers Conference that its integrated spotlight search will ditch Google's search for Microsoft's Bing. Separately, Microsoft announced that it will be working closely with OEM partners to bring prices Microsoft Windows 8.1-powered devices into the $100-$300 range and that some Windows Phone models will be sold for under $200. Gaining developer support and consumer mind-share is critical, and Microsoft's moves to drive prices lower should be a long-term positive for the Windows ecosystem.


Leading chipmaker Broadcom announced on Monday that it will exit the cellular baseband space. This was a money-losing operation for the company, costing the firm about $700 million in GAAP operating expenses all while generating very little in the way of sales. Investors and analysts had been looking for the company to pull the plug on this operation for quite some time, and when the company realized that it simply couldn't gain the traction necessary to continue these operations, it decided to do just that. Of these savings, the company plans to allocate $50 million to its core infrastructure and broadband businesses, both of which had been running lean as a result of the large baseband investment. Shares were up 19.2% for the week.


Finally, social-game maker Zynga plunged this week, closing down 13.6%. This drop was triggered by comments from CEO Don Mattrick at a recent conference that cautioned investors to expect a seasonally weak summer along with continued margin pressure as a result of continued investments in the company's core products. That said, the company has been fairly successful at both trimming its headcount and stabilizing key audience metrics, so it's not all doom and gloom for this once high-flying company.

Leaked: Apple's next smart device (warning -- it may shock you)
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Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple and Google (A and C shares) and owns shares of Apple, Google (A and C shares), and Microsoft. 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.

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