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Tech Stocks

Stocks

Buy, Sell or Hold: Is Rackspace's Cloud Being Vaporized?

Rackspace Hosting (NYSE: RAX) is currently the number two provider of cloud computing. The company has been under the microscope lately as its stock has dropped nearly 45% year-to-date.

But the microscope is not just fixated on Rackspace, it's also focused on the entire cloud computing sector.

This sector is growing rapidly with analysts speculating enthusiastically that the overall cloud market could reach anywhere from $40 billion to $70 billion by 2016 or earlier.

But with extreme growth comes extreme competition. This competition is not coming from the under $6 billion market cap companies similar to Rackspace.

The company's competition comes from the largest names in tech – Microsoft and industry leader Amazon.

For those unfamiliar with the term "cloud computing" the business is quite simple to describe.

Hot Stocks

Google (Nasdaq: GOOG) Stock Slumps – But Outlook Still Bright

Google Inc. (Nasdaq; GOOG) stock plunged after its earnings report missed estimates.

Thursday after the close, Google's posted Q2 profit of $9.71 billion, or $9.54 a share, up 19% from $8.54 billion, or $8.42 a share, in the same quarter a year earlier. Revenue rose to $11.1 billion from $9.61 billion.

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Hot Stocks

Microsoft Earnings Call to Focus on Reorg Plan (Nasdaq: MSFT)

The Microsoft earnings call today will demand clarity on CEO Steve Ballmer’s recently released reorganization plan, and what it means for investors.

Microsoft Corp. (Nasdaq: MSFT) reports fourth-quarter earnings Thursday after the close, and expectations are for solid numbers and growth – at a time when a lot of analysts are down on the stock.

Despite a significant slump in the PC market, the Redmond, WA-based company is expected to post a small uptick in earnings and revenue.

Analysts are looking for the tech giant to report earnings of $0.75 per share on revenue of $20.7 billion, up from $0.73 on revenue of $18.06 billion a year ago. Full-year earnings are projected to come in at $2.74 per share on full-year revenue of $78.6 billion.

While modest, those Q4 gains will likely be warmly welcomed by Wall Street.

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IPOs

A Guide to Pricing and Investing in Tech IPOs

Earlier this week, I shared with Money Morning readers a breakdown on how IPOs are priced.

In this IPO pricing overview, Money Morning Capital Wave Strategist Shah Gilani explained the pitfalls of over- and underpricing an IPO.

An overpriced IPO can be a death sentence for a company, generating bad PR, a stock that bombs, and more. Facebook's (NASDAQ:FB) IPO disaster is a prime example of IPO overpricing.

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Tech Investing

These Tech Companies Will Ride the Mobile Wave to Big Profits

Companies that make CPU chips – the "brains" inside every kind of computing device – have a fresh catalyst within the mobile wave to help stimulate sales: "ultramobile" products.

Ultramobile is the term that research firm Gartner is using to describe very small and light notebooks, as well as tablet/laptop hybrids like the Microsoft Corp. (Nasdaq: MSFT) Surface.

In its projection for this year and next, Gartner sees the ultramobile category adding to the growth of mobile wave devices like smartphones and tablets, which together today form a much bigger market than that of traditional PCs.

Ultramobiles will create new opportunities for the CPU-makers as the mobile wave continues to rise.

"The 'mobile wave' is massive, and is where growth is at in the chip sector," said Money Morning Defense and Technology Specialist Michael Robinson.

Major beneficiaries in this space include ARM Holdings plc (Nasdaq ADR: ARMH), Qualcomm, Inc. (Nasdaq: QCOM), and of course Intel Corp. (Nasdaq: INTC).

At stake are billions of dollars in revenue.

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Tech Investing

What Are the Best Investments in Tech Now

Our readers know that the technology sector holds some of the most exciting and lucrative profit opportunities, which is why we're constantly asked, "What are the best investments in tech right now?"

Tech is the largest single segment of the market. But more importantly, it's the driver of innovation and invention that leads to a steady stream of progress and fascinating new products.

Just look at this year's latest developments in mobile devices, 3D printing, and graphene.

Despite its promise, not all tech stocks have performed as well as the broader market in 2013.

The Standard & Poor's 500 Technology sector is up just 7.4% year-to-date, compared to the S&P 500 Index's 13.9% gain. Blame Apple Inc's. (Nasdaq: AAPL) struggles and fall from grace (shares are off some 40% from its September high) for S&P tech stocks' muted showing.

However, when looking at a wider picture, tech's performance since the start of the year is robust.

Indeed, average gains for tech stocks in the Russell 3,000 are 21.9%. The broad based Russell 3,000 is made of up all Russell 1,000 (large and midcaps) stocks and Russell 2,000 (small caps).

Following are few examples of the explosive growth enjoyed by tech industry winners so far in 2013:

Tech Investing

Why the Microsoft Reorganization Plan Won't Fix What's Wrong

With a Microsoft reorganization plan expected to be announced on Thursday, investors at this point must be wondering: will it matter?

Shareholders of Microsoft Corp. (Nasdaq: MSFT) have only recently gotten a glimmer of hope. Microsoft stock had languished in the $25-$30 range for more than a decade until this year, which has seen MSFT pop about 30%.

Although extremely profitable, Microsoft under the leadership of CEO Steve Ballmer has struggled to move beyond its core products of Windows and Office, which still deliver nearly all of those profits.

What this new Microsoft reorganization plan needs to do is reorient the Redmond, WA-based company toward future engines of growth, such as the mobile wave of smartphones and tablets, cloud computing and big data.

Insiders say Ballmer intends the new structure to provide "functional coherence" and will align the company into divisions based on services and devices.

But given Ballmer's spotty track record and Microsoft's unwieldy size (98,000 employees), it's not a given that any major structural overhaul will do much good in addressing the company's real problems.

As one worried Microsoft insider told The Wall Street Journal's All Things D: "If this is all about an org chart and not how to build great products, it does not matter what org chart Ballmer presents. Consumers buy products, not management structure."

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Tech Investing

Five Reasons Apple Stock is a Buy

With Apple Inc. (Nasdaq: AAPL) bears feeling vindicated by the company's fall from grace and shares hovering in the $400 range, it might sound like a stretch to say Apple stock is a buy.

But given all that's happened, AAPL at $400 is a better deal than it may appear.

"It's obviously been hit, but it's bounced. It's held up," said Money Morning Capital Wave Strategist Shah Gilani. Pointing to the recent volatility in the markets, Gilani said, "The markets have been hit really hard and Apple has held up beautifully."

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