Another week of elevated jobless claims failed to stop the Dow Jones Industrial Average (DJINDICES:^DJI) from rising on Thursday. The Dow was up 1.2% at 12 p.m. EDT despite another 4.43 million Americans filing for unemployment last week. The total number of claims over the past five weeks now stands at an astonishing 26.5 million.
Apple (NASDAQ:AAPL) stock moved higher on Thursday, while Intel (NASDAQ:INTC) stock dipped slightly. A report indicated that Apple will launch the first Mac computer powered by its own chip sometime next year, reducing its dependence on Intel. That news didn't have much of an effect on Intel stock as the chip giant prepares to report its quarterly results after the market closes.
Macs with Apple-designed chips are coming
Apple has long designed its own processors, based on the ARM architecture, for its iPhones and iPads. Apple's latest A13 Bionic chip, featured in the iPhone 11 family as well as the new iPhone SE, comes with six cores and is 30% more power-efficient than its predecessor.
While ARM-based chips power nearly all mobile devices, the PC market is dominated by the x86 architecture. Microsoft Windows runs on x86 chips from either Intel or Advanced Micro Devices, and attempts to bring ARM-based PCs to market in recent years have shown little success. Part of the problem: Any software written for an x86-based platform must be either recompiled or emulated. The first option puts the onus on developers, while the second comes with a negative impact on performance.
This architecture mismatch between mobile devices and PCs is one reason Apple still uses chips from Intel to power its Mac computers. However, the company is now reportedly set to launch its first ARM-based Mac in 2021, beginning its shift away from Intel. Bloomberg reported on Thursday that Apple is planning to debut next year at least one Mac powered by its own chip, based on the upcoming A14 chip that will power the next iPhone.
The new Macs will still run Apple's macOS operating system, and the company is working on tools that allow apps developed for Intel-based Macs to run on ARM-based systems. How well it will all work remains to be seen.
Apple stock was up 1.3% around noon. Shares of the tech giant are down about 15% from their 52-week high.
Intel reports today
Speaking of Intel, the chip giant is scheduled to report its first-quarter results after the market closes today. Intel has been seeing strong demand for its PC chips in the early stages of the pandemic as working from home has become commonplace, and demand for its server chips has also been strong as companies and service providers deal with increased usage. But with the U.S. likely in a recession of unknown length and severity, the staying power of this beneficial demand environment is unclear.
Analysts are expecting Intel to report first-quarter revenue of $18.7 billion, up 16.4% from the prior-year period. Adjusted earnings per share of $1.28 is expected, up from $0.89 in the first quarter of 2019. It should be noted that Intel was dealing with a slowdown in its data center segment at the beginning of 2019, which hurt its results.
How Intel's results evolve throughout the rest of the year is highly uncertain. If we find ourselves in a severe recession, demand for PCs will likely tumble, hurting the PC-centric business. Spending by cloud infrastructure providers could slow down as well, given that many companies that rely on cloud computing services are being hit hard by the pandemic.
Intel stock has recovered most of what it lost since peaking earlier this year, down just 14% from its 52-week high. Shares were down 0.6% by midday Thursday.