Tech Stocks Update: Intel, Apple, AMD & Microsoft

The tech industry created a buzz this week, particularly surrounding tech giants Microsoft, Intel, Apple, and AMD. 

Each company made headlines for different reasons, and here's what you need to know about it:

Microsoft’s Whopping Market Cap

Microsoft (MSFT) reached a market cap of $3 trillion on Wednesday, January 24, joining its tech rival Apple as one of only two companies to achieve this historic record-high, surpassing France’s Gross Domestic Product (GDP) and approaching the UK’s GDP.

It seems that one of the primary catalysts behind these notable gains is the ever-growing excitement around Artificial Intelligence (AI), which has contributed to a 1.5% surge in Microsoft’s stock value on Wednesday and a 40% rise throughout 2023. 

The company's CEO, Satya Nadella, has notably led this AI boom by making multibillion-dollar investments in AI in 2023, involving the integration of AI tools like ChatGPT into Microsoft’s product suite. 

Given Microsoft’s strong performance, analysts from JPMorgan believe that the company’s influence in the AI sector will strengthen further, and both JPMorgan and Bank of America elevated the price target to $450 in anticipation of continued gains for the technology giant. 

Traders may want to keep an eye out for Microsoft’s upcoming earnings release this month on January 30 to see whether the company will be able to sustain this strong momentum.

More AI Partnerships on the Horizon?

In accordance with an announcement from the National Science Foundation (NSF) on Wednesday, major technology corporations such as Amazon (AMZN), IBM (IBM), Microsoft, Meta (META), NVIDIA (NVDA), OpenAI, and various non-profit organizations are set to participate in a two-year pilot program alongside the NSF. 

This initiative is designed to establish and “democratize” a national resource for researchers and educators, providing them access to advanced AI tech and programs. 

The overarching objective is to ensure that the US maintains its leadership in AI research and innovation. 

Accordingly, NSF Director Sethuraman Panchanathan explained that “by investing in AI research through the NAIRR pilot, the United States unleashes discovery and impact and bolsters its global competitiveness.”

It will be intriguing to see the outcomes of this initiative and how it can affect the tech sphere.

AMD’s Wednesday Gains 

American semiconductor giant Advanced Micro Devices (AMD) soared by 3.2% propelled by an upgrade from analyst Pierre Ferragu from NewStreet Research. Ferragu elevated AMD's rating from Neutral to Buy and increased its price target to $215.

According to Ferragu, “AMD is the best way to play data center AI chips if the company's forecast of a $400 billion addressable market by 2027 bears out.”

Despite this positive trend and outlook, it is crucial to bear in mind the fact that AMD’s stock has been overall volatile throughout 2023. Moreover, the overall market can be unpredictable, so traders may want to consider other factors that could impact this outlook. (Source: Yahoo Finance)

Apple’s 2024 Challenges

iPhone-maker Apple (AAPL) has garnered less-than-favorable attention recently due to a challenging start in 2024. 

The company faces a potential antitrust lawsuit against the Department of Justice, restrictions in its App Store policy from the European Union, price downgrades, and a legal dispute with Masimo over intellectual property which resulted in the removal of the blood-oxygen feature from two Apple Watch models.

In addition, many may feel apprehensive about Apple’s Vision Pro Headset launch. While this is undoubtedly exciting news, some observers note that it signifies Apple entering a market where rivals like Meta have faced challenges. 

Furthermore, recent reports have revealed a decline in Apple’s sales in China, the world’s second-largest economy and Apple’s third-largest market, driven by increasing competition from Chinese tech companies like Huawei. 

On the other hand, despite these overarching challenges, some analysts believe that Apple may be able to rebound, primarily due to advancements in AI. 

Interestingly despite this year’s woes, since the beginning of 2024 and as of the time of the writing Apple gained 4.8%. 

Traders may also want to closely monitor Apple’s upcoming earnings report on February 1 to gain insights into the performance of one of the world’s most valuable companies.

Earnings Preview: Intel’s Q4 Results

Intel (INTC) is scheduled to report its Q4 earnings today, Thursday, January 25 after market close.

Intel too, like many other companies, seems to be pushing towards the advancement of AI.

Notably, Intel has worked on this through various products, especially through its Core Ultra PC chips which are expected to run on AI apps.

Analysts expect Intel's Q4 earnings to improve as they project an EPS of $0.44 and revenue of $15.2 billion. If these projections come to fruition then they would be above Q4 2022 when EPS of $0.10 and revenue of $14 billion. 

Nonetheless, these are all projections and only time will tell whether they will materialize or not.

Conclusion

In what seems to be a dynamic week, Microsoft hit a $3 trillion market cap driven by AI excitement, AMD gained a post-analyst price target upgrade, and Apple faced some challenges. Additionally, a collaborative AI initiative was announced between US tech companies and the NSF, adding to industry shifts as investors and traders await Intel’s earnings release. What else does the future have for the tech sector.