In the equities market, the Semiconductor Index shows the downward movement since the beginning of 2011.
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New York, NY (PRWEB) November 03, 2012
In a recent Profit Confidential article, financial expert George Leong states that while the big banks are providing some leadership to the equities market, technology and growth stocks need help. Leong reports that after announcing below-consensus revenues, two of the top chipmakers in the equities market are both expressing caution towards the global economy and growth.
“In the equities market, the Semiconductor Index shows the downward movement since the beginning of 2011,” says Leong. “The chart shows a potential bearish ‘pennant pattern’ that points to the convergence of the upper and lower trendlines, followed by a possible decline to the 200-day moving average (MA).”
In the article “What Chipmakers Are Facing in this Market,” Leong highlights two top chipmakers in the equities market, which are both expressing caution on the global economy and growth: Advanced Micro Devices (AMD) and Intel.
“Chipmaker Advanced Micro Devices made a downward revision in its third-quarter revenues to below consensus, citing the global economy as the reason,” reports Leong. “For the third quarter, Advanced Micro Devices said revenues would contract 10% on a sequential basis.” (Source: “AMD Announces Preliminary Third Quarter Results,” Advanced Micro Devices, Inc., October 11, 2012.)
Leong notes that the decline is worse, given the previous guidance by AMD, which had estimated revenue growth would fall a maximum of four percent or grow a maximum of three percent. (Source: Advanced Micro Devices, October 11, 2012.)
His concern is that the wide revenue range previously offered by AMD clearly suggests the company is uncertain about the operating climate.
The Profit Confidential expert notes that Intel Corporation managed to beat consensus earnings, but only after Wall Street lowered its estimate.
“Revenues came in at $13.5 billion, which beat on its revenue estimate of $13.2 billion,” says Leong. “The problem was that revenues only beat the lower target and were short of the initial guidance of between $13.8 billion and $14.8 billion.” (Source: “Intel Beats Lowered Q3 Expectations,” Yahoo! Finance from Zacks Investment Research, October 16, 2012.)
Leong also reports that the firm cited the uncertainties of the global climate as the cause; Intel also warned to expect weaker fourth-quarter revenues, he adds. (Source: Yahoo! Finance, October 16, 2012.)
“For success in the equities market, AMD and Intel must adapt to the new realm of mobile technology and focus on making chips for the next generation of tablets and smartphones,” concludes Leong.
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