Why Intel Will Move the Dow Tomorrow

As earnings season gains momentum, the Dow's first tech company will release its results. Find out what to expect.

Jul 15, 2014 at 12:30PM

Earnings season for the Dow Jones Industrials (DJINDICES:^DJI) has started to gear up, with favorable results from the Dow's financial companies making investors more optimistic that this quarter's results will provide a much-needed shot of confidence for the economic recovery. Later today, though, Intel (NASDAQ:INTC) will weigh in on the current state of affairs in the technology industry, and the Dow-component chip-maker's results could have a huge impact on prospects not just for its own stock but for Microsoft (NASDAQ:MSFT) and tech stocks more broadly.

Intel expects to release its earnings report shortly after the market closes this afternoon at 4 p.m. EDT. It will then have a conference call at 5 p.m. EDT in order to discuss the results.


Investors have been increasingly optimistic about Intel's recent results, bidding the stock up by double-digit percentages in just the past few months. With expectations of earnings growth of a third from year-ago levels, Intel has set the bar high for today's report.

Of course, Intel shareholders have already gotten advance notice of what would have been the most surprising element of the company's growth. Last month, Intel raised its sales guidance for the quarter and full year, citing not Intel's initiatives to break more deeply into the mobile-chip space but rather a big boost in demand for PCs, in which Intel remains the dominant provider of microprocessor chips. Enterprise customers apparently responded to Microsoft's elimination of customer support for older-line operating system software by replacing their hardware at the same time, and that should provide a nice boost for Intel in a business that until now has shown few signs of ending its long-term decline.

Intc Logo Thing

Source: Intel.

Yet the trap for investors is putting too much importance on a bounce in PC demand. Intel, Microsoft, and many other tech players will reap huge profits from the PC industry for years to come, but growth prospects there are likely to be fleeting at best. By contrast, Intel's forays into initiatives like the Internet of Things could drive future growth, with initial results already having been promising. Moreover, mobile devices are still a key opportunity for Intel to capitalize on, with new chip offerings allowing Intel to set ambitious targets to boost shipments of mobile-specific processors by the end of the year. Intel is far from the only company banking on the ongoing mobile revolution, but cutthroat competition will make achieving growth targets that much harder for every company in the industry.

Intel will move the Dow, as shareholders draw conclusions from its results about the health of the technology industry overall. If Intel disappoints this afternoon, then the Dow's recent record runs could come to an end at least temporarily.

Warren Buffett: This new technology is a "real threat"
At his recent annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Dan Caplinger has no position in any stocks mentioned. 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