Two Tech Titans Are Regaining Their Mojo

Microsoft Corporation (NASDAQ:MSFT) Price and Consensus

Microsoft Corporation Price and Consensus | Microsoft Corporation Quote

Our second pick is Intel Corp (INTC), a Zacks Rank #1 (Strong Buy), who also recently reported earnings where they crushed both the top and bottom line expectations. The company reported record operating income (+15% YoY), and earnings per share (EPS) (+36% YoY). Specifically, the data center, Internet of Things (IoT), and memory businesses all achieved record revenues. Management commented that the estimate beats were driven by “strong data-centric growth, expanding operating margins, and gains in the sale of equity investments.” INTC has also been moving from being a PC-centric to a data-centric company. They have been accomplishing this goal via acquisitions, and organically.

The company also just completed their acquisition of Mobileye (OTC:MBBYF), four months ahead of schedule. Mobileye develops computer vision and machine learning, for sophisticated driver assistance systems, and autonomous driving. Management views this new addition as, “an exciting engineering challenge and a huge growth opportunity for Intel.”

One of Intel’s main competitors in the autonomous driving segment is Nvidia, but this is not the only area in which INTC is attacking this processor company. Intel also recently made headlines with the announcement that they and AMD have agreed to partner on a PC chip to take on the gaming graphics chip maker Nvidia. The partners are expected to announce a notebook computer semiconductor that utilizes a graphic chip from AMD, and a processor from Intel. This combination is expected to be able to run powerful video games via a lightweight laptop.

The Price and Earnings Consensus graph below shows the recent upswing of Intel, and the corresponding rising consensus earnings estimates.

Intel Corporation (NASDAQ:INTC) Price and Consensus

Intel Corporation Price and Consensus | Intel Corporation Quote

To add to the positive news, management also increased both their earnings and revenue expectations for Q4. Revenues were raised from $15.7 billion to $16.1 billion, and EPS was lifted from $0.80 to $1.01. As for the dividend, Intel pays an annual dividend of $1.09 for a yield of +2.33%.

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