Why Apple and Nuance are Rallying as Rambus Tumbles

Shares of tech stocks were active on Tuesday, with Apple, Nuance, and Rambus experiencing notable moves.

Jul 22, 2014 at 3:30PM
Longview

The Dow Jones Industrial Average (DJINDICES:^DJI) had risen more than 66 points as of 11:30 a.m. EDT Tuesday. Both Apple (NASDAQ:AAPL) and Nuance Communications (NASDAQ:NUAN) were moving higher alongside the market, while shares of Rambus (NASDAQ:RMBS) tumbled.

Apple said to prepare for massive iPhone demand
Although Apple shares rose only a modest 0.3% by late morning, the stock was among the most actively traded.

According to The Wall Street Journal, Apple is tapping its suppliers for what could be its largest iPhone release ever. Apple is reportedly asking for enough displays to produce 70 million-80 million new iPhones by the end of the year. The new models are said to come in both 4.7- and 5.5-inch varieties.

If those figures are accurate, the company expects the iPhone 6 to sell far better than its immediate predecessor -- Apple's initial order for the iPhone 5s and iPhone 5c was between 50 million and 60 million units. 

Expectations are running high for Apple's next iPhone, with a string of analysts recently upgrading the stock on projections for a strong fall debut. With such lofty projections, anything other than a record quarter may hurt Apple shareholders. Investors should get further insight into how Apple sees the rest of the year playing out when it reports earnings later today.

Images

Source: Wikimedia Commons

Nuance releases new Dragon software
Shares of Nuance rose 0.6% on Tuesday after the company announced the release of Dragon NaturallySpeaking 13. Like Nuance's previous Dragon releases, the program gives PC users voice-to-text capabilities, allowing them to dictate rather than type. Nuance claims that Dragon 13 is the most advanced version of the software yet.

The software, which retails for $99-$199 (depending on the version), could give Nuance a boost should it prove popular. But investors are likely interested in Nuance's mobile ambitions rather than its PC-focused products.

Nuance's technology has long been rumored to power Apple's digital personal assistant, Siri. In recent months, Apple has purportedly been poaching Nuance's employees to improve Siri internally, while Apple's chief smartphone rival, Samsung, has been said to be considering a bid for the company. The release of Dragon 13 doesn't directly affect any of that, but it does reaffirm Nuance's place in the speech recognition software market.

Rambus tumbles on guidance
Shares of technology licensing company Rambus fell 5% early on Tuesday following the company's earnings report. Although Rambus' second-quarter results exceeded analysts' expectations (a diluted earnings-per-share figure of $0.16 blew away a $0.05 estimate), investors were likely reacting to disappointing guidance.

In the third quarter, Rambus' management expects revenue to come in between $68 million and $73 million. Prior to the earnings report, analysts had projected third-quarter revenue of just a bit more than $73 million.

During its earnings call, Rambus' management hinted at a forthcoming deal with a large memory partner that could bring in significant revenue in 2016. However, when pressed, the company refused to offer specific details.

While the sell-off seems justified in the context of disappointing revenue guidance, investors may be overreacting. Despite the third-quarter guidance, management left its full-year revenue outlook unchanged, suggesting that some of the revenue expected in the current period could be pushed out into the end of the year. 

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 Nuance Communications. The Motley Fool owns shares of Apple and Nuance Communications. 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 9:54PM

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