5 Stories JP Morgan's Tech Analysts Are Watching
In a report published Wednesday, JP Morgan analysts Rod Hall and Ashwin Kesireddy detailed five tech-related stories they are following.
1. Corning's Guidance Missing Key Segment
Corning Incorporated (NYSE: GLW) largely reiterated its target to grow its sales in 2015. The analysts noted that the drivers of growth are now identified as OpCom, Environmental and LifeSciences, but Specialty Materials is "notably" missing.
Furthermore, in the Environmental and Life Sciences segments, the weaker euro was highlighted as a potential headwind.
2. Verizon Acquires AOL
The analysts commented on Verizon Communications Inc. (NYSE: VZ)'s acquisition of AOL, Inc. (NYSE: AOL), noting Verizon may have been interested in AOL's "key assets" which include its subscription business, its premium portfolio of global content brands (including The Huffington Post, TechCrunch, Engadget, MAKERS, and AOL.com), as well as its millennial-focused OTT, Emmy-nominated original video content and its programmatic advertising platforms.
3. Intel Looking To ‘Boost Horsepower' On Server Chips
Intel Corporation (NASDAQ: INTC) is expanding its custom server chip program by integrating a special processing unit that could speed up specific applications in cloud computing.
The analysts noted that Intel declined to comment on the type of ASICs being integrated, or when it will be integrated in future Xeon chips. What is known is the integrated ASICs will be reprogrammable, and customers will be able to add more flexibility to their servers to handle specific types of tasks.
4. Electronic Components Sector: Are Renewed Rush To Build MLCC Plants A Concern?
The analysts stated that adding substantial capacity just prior to the financial crisis, together with rapid growth in Samsung Electronics' market share, resulted in a "sharply" weaker earnings on softer demand and a decline in pricing. This will remain "fresh" in investors' memories and investors may react negatively to Samsung's planned expansion of building factories to produce multilayer ceramic capacitors (MLCC).
5. Cisco Expected To Deliver ‘Slight Beat' In Q3
The analysts estimated Cisco Systems, Inc. (NASDAQ: CSCO) to report a "typical" $0.01 to $0.02 earnings per share beat in its third quarter print and guide its fourth quarter earnings per share "largely" in-line with consensus estimates.
Furthermore, the analysts are also expecting in-line switching revenue and "slightly better" than expected routing performance in the third quarter.
Foreign exchange will have a "mixed impact" though weaker demand due to the strong U.S. dollar will factor into the fourth quarter guidance.
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