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
Longview

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.

G

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.

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