Tech stocks are negatively influenced by the coronavirus and are falling seriously. The most significant drops were demonstrated by AAPL and MSFT yesterday.Most of the tech stocks fell yesterday notably.First, it was Microsoft Corporation (NASDAQ: MSFT) that said it will not meet its guidance.Microsoft (MSFT) and CoronavirusPrecisely, it wrote, quite worrying letter to investors in which it says:“Because of closely monitoring the impact of the COVID-19 health emergency, for the third quarter of the fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”After that, all (tech) hell broke loose.At the time of writing (4:58 am ET) Microsoft was down in the pre-market 3.27% to
Topics:
Teuta Franjkovic considers the following as important: amd, apple, apple stock, Business, coronavirus, duco pasmooji, intel, microsoft, microsoft stock, Mobile, News, nick forlenza, Nvidia, Stocks, Technology, tim cook, Wall Street
This could be interesting, too:
Bitcoin Schweiz News writes Reich mit Aktien! Was Finanz-Influencer Tim Schäfer besser macht als die meisten
Temitope Olatunji writes X Empire Unveils ‘Chill Phase’ Update: Community to Benefit from Expanded Tokenomics
Bhushan Akolkar writes Cardano Investors Continue to Be Hopeful despite 11% ADA Price Drop
Bena Ilyas writes Stablecoin Transactions Constitute 43% of Sub-Saharan Africa’s Volume
Tech stocks are negatively influenced by the coronavirus and are falling seriously. The most significant drops were demonstrated by AAPL and MSFT yesterday.
Most of the tech stocks fell yesterday notably.
First, it was Microsoft Corporation (NASDAQ: MSFT) that said it will not meet its guidance.
Microsoft (MSFT) and Coronavirus
Precisely, it wrote, quite worrying letter to investors in which it says:
“Because of closely monitoring the impact of the COVID-19 health emergency, for the third quarter of the fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”
After that, all (tech) hell broke loose.
At the time of writing (4:58 am ET) Microsoft was down in the pre-market 3.27% to $153. Because it is still premarket, we can only imagine how the stock will act during the day. It ended the day with 7.05% fall.
As we already say, other techno stocks weren’t much better. Advanced Micro Devices Inc (NASDAQ: AMD) was falling 6.04% in premarket, Intel was down 3.13%, NVIDIA Corporation (NASDAQ: NVDA) by 3.45% and Apple Inc (NASDAQ: AAPL) was down by 3.48% in the pre-market session.
Of course, it was pretty clear that because of Microsoft’s release, everything will be going down from there. The Windows OEM segment refers to PC makers that buy chips directly from AMD, NVIDIA, and Intel Corporation (NASDAQ: INTC).
Apple Acknowledges Challenges Regarding Coronavirus Outbreak
Even though Apple is not directly related to Microsoft’s Windows OEM business, it had it’s own issuance also about missing its outlook due to the coronavirus outbreak. Its CEO Tim Cook acknowledged the “challenge” that the outbreak represents at the company’s annual shareholder meeting yesterday. However, he also said he thinks that Beijing is “getting the coronavirus under control,” adding that he is “very optimistic there.” Still, on the same day, it was announced that there is a change in an exec sector where one vice president has retired, while another is discussing an exit in the near future.
As per the reports, Nick Forlenza, VP of manufacturing design, has retired from Apple while Duco Pasmooji, a VP focused on operations, allegedly plans to leave as well. Even though these moves don’t have anything related with the ongoing coronavirus crisis, they come at a critical time for the company.
This Might Be Good for Apple After All
Be it as it may, we still think that this could be a good news to investors. Yeah, yeah, we know – it sounds crazy. However, let us guide you through this a bit.
When Apple issued its fiscal second-quarter earnings warning saying it expects slower production after CNY and because of coronavirus, it also closed a lot of its stores as well.
It’s normal that in situations as these, investors are becoming nervous. It this situation gets really ugly – Apple might report even worse second-quarter results than it was previously thought. We are speaking about billions lost. But bear in mind that, those issues are only supply related – and not demand-driven.
When Apple issued an earnings warning at the start of 2019, it was because of a lack of demand, particularly in China – people didn’t want to buy expensive phones if they had a cheaper alternative that worked similarly. This time around, business was booming in China and would have continued to do so if it wasn’t for coronavirus.
Outside of China, demand was strong as usual. If demand outside of China can offset the weakness more than Wall Street is forecasting for the second quarter, Apple shares could get a lift.
Also let’s not forget the perfectly possible moment where the sales recorded during the current quarter appear in the quarter ending in June. That’s typically a seasonally slow period for Apple, and it could use that time to catch up on demand and get the supply chain back in order.
Also, let’s not forget that the company is expected to launch its first 5G phone in the fall. That could mean that consumers who were prevented from purchasing an iPhone 11 because of the epidemic, buy an iPhone 12 instead. If that proves true, the coronavirus would become just a past for Apple, and the stock could be rewarded.
Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.