This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tech Titans May Save the World

Stocks in this article: IBM INTC MSFT GOOG

NEW YORK ( TheStreet) -- Whoever is betting against the tech sector and pushing the Nasdaq lower today must have missed last night's tech earnings bonanza.

The results posted last night by IBM (IBM - Get Report), Microsoft (MSFT - Get Report) and Intel (INTC - Get Report) revealed two important trends that bode well for the tech sector: companies are spending on hardware and software and demand is growing in emerging markets. The tech sector suddenly seems much healthier than the Nasdaq's 0.12% Friday dip would suggest.

IBM was among the companies reporting results after the markets closed Thursday.

Even Google (GOOG), which missed Wall Street's profit estimate by almost a dollar, surpassed $10 billion in quarterly revenue for the first time on Thursday, citing rapid growth in emerging countries.

Intel also struck a bullish tone during a conference call after market close. "2011 was our most profitable year and a year of record revenues," noted Stacy Smith, the Intel CFO. "We expect continued strength in emerging markets as rising incomes increase the affordability of personal computers."

With other big names such as Dell (DELL), Cisco (CSCO), AMD (AMD) and Symantec (SYMC) yet to report their results, positive comments this week, particularly from IBM, Microsoft and Intel, could bode well for the rest of the sector.

Despite growing concerns about the global economy, particularly debt-ridden Europe, IBM, Microsoft and Intel all beat Wall Street's earnings forecasts, with chipmaker Intel also edging analysts' revenue projections.

Microsoft Chief Financial Officer Peter Klein, for example, said that enterprise spending is helping the software giant deal with a sagging PC market. "The overall business environment remains strong for us," he said.

Revenue from the software giant's Server and Tools business grew 11% year over year, boosted by double-digit growth in Windows Server and SQL Server premium. Sales of Exchange and SharePoint products also climbed 10%, while revenue from its Lync communications software and Dynamics CRM grew by more than 30%.

Still, though, weakening PC sales helped push revenue from Microsoft's Windows and Windows Live division down 6% year over year.

Nonetheless, Microsoft refused to be beaten down by the soft PC market. "In terms of PCs -- there's still growth, we're still in the refresh cycle," explained Klein during the conference call. "Emerging markets will continue to drive PCs."

Intel also put a healthy spin on PCs during its fourth-quarter conference call. The world's biggest chipmaker has thrown its weight behind a new category of super-skinny laptops, dubbed ultrabooks, which it claims will breathe new life into the ailing personal computer market.

"I haven't seen this level of excitement in the customer base since 2003," said Intel CEO Paul Otellini, explaining that more than 70 ultrabooks will launch this spring. "People are very excited about the feature set and having the PC re-energized."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs