What to Expect in Tech Next Week: Intel and SanDisk Earnings

Tech investors should watch for Intel and SanDisk's earnings reports next week.

Jul 12, 2014 at 10:50AM

With a lack of major media events next week, tech investors will be drawn to earnings reports. In particular, chip giant Intel (NASDAQ:INTC) and solid state drive-maker SanDisk (NASDAQ:SNDK) are expected to post quarterly earnings results.

Those reports could weigh on the stocks of computing device manufacturers, as the companies are major suppliers to the PC (Intel) and mobile markets (SanDisk).

The revenge of the PC
Despite attempting an aggressive move into the mobile device market, Intel's business remains largely dependent on the demand for traditional -- laptop and desktop -- PCs. That's not necessarily a bad thing, at least for now, as the end of extended Windows XP support seems to triggered a significant PC refresh cycle.

Last month, Intel raised its guidance for the second quarter, saying that it expected to post revenue of $13.7 billion -- $700 million more than it had originally forecast. In addition to better revenue, Intel anticipates a slightly better (up 1%) gross margin, as demand for its PC processors appears to be coming in better than it had expected.

Intel has been one of the best-performing major tech stocks in recent months, rising nearly 20% since it last reported earnings. Investors might assume that expectations for a strong quarter are already baked into Intel's share price, but its price-to-earnings ratio is still below the broader S&P 500.

INTC Total Return Price Chart

INTC Total Return Price data by YCharts

In addition to Intel, investors might expect other PC-related stocks to react to the company's report. Many other PC firms have seen share price appreciation (roughly in line with Intel's) over the last few months, and a much better or much worse than expected quarter could trigger moves in other PC names.

Intel is expected to report earnings on Tuesday following the market close. Analysts are looking for the company to report earnings per share of about $0.52 on revenue of roughly $13.7 billion.

A check on flash memory demand
SanDisk will release its second quarter earnings results a day after Intel, with a conference call to discuss its quarter after the market closes. Analysts are expecting SanDisk to post earnings per share of about $1.39 on revenue of roughly $1.6 billion.

SanDisk's results should shed some light on the state of the flash memory market, and by extension, the demand for mobile computing products. Although SanDisk supplies sold state drives for both enterprise storage and traditional PCs, it's also a major mobile supplier, and management might be tempted to release strong guidance if reports of an excessively large iPhone 6 order are accurate.

Given that flash memory is a growing market, SanDisk presently trades with an above-market price-to-earnings ratio near 22. A worse-than-expected quarter could trigger a severe sell-off. Nevertheless, analysts remain undeterred. Last month, Merrill Lynch upgraded SanDisk to buy from underperform with a $125 price target. Analysts at the firm saw little risk to SanDisk's business from its competitors, and believed that the market for its products remains healthy.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers