Back to top

Technology Stock Roundup: Facebook (FB) on a Roll

Read MoreHide Full Article

Last week saw a flurry of activity at the top technology companies. Here are a few tidbits:

What’s Facebook Playing with Now?

Facebook (FB - Free Report) had a number of interesting announcements, but the one that helped it end the week on a higher note was gaming. The company has decided to provide the necessary tools to small and medium-sized game developers in exchange for undisclosed profits from their sales.

Of course, its services will not be available to all and sundry – Facebook intends to select the folks it wants to work with. The company has selected ten partners so far and will be helping them with analytics tools and highly targeted advertising (roughly a third of the 800 million Facebook users play games on Facebook).

Facebook’s position is rather unique because of the wealth of personal information it has accumulated to date and the information it continues to accumulate. This service would be of great importance to smaller developers that don’t have the resources to compete with already-established players.

Tim Cook Goes to China

Last week, Apple (AAPL - Free Report) CEO Tim Cook met with China Mobile (CHL) Chairman Xi Guohua. China Mobile is the largest carrier in the country and the only one not selling Apple devices.

One of the reasons for this could be that Apple has always taken the cream of the  market and the Chinese government (also a major shareholder in China Mobile) may have feared for local players. But the more important reason that is likely to have kept it away from Apple is the cost of subsidizing Apple’s expensive device that has made life extremely difficult for other Chinese carriers.

But the situation is a bit different today. First, because Apple just did very badly in China and needs to do something to boost China sales. Second, it has a cheaper phone in the works that could be easier to subsidize. Third, China Mobile has a huge capex budget that is likely to get used to upgrade the network to 4G/LTE.

And finally, the Chinese government could be announcing wireless number portability soon, which would make it easier for dissatisfied China Mobile customers to move to competing networks. Both companies have a lot to gain from a partnership, which is what is going to happen now.

Yahoo Entering Choppy Waters

After a year at the helm, CEO Marissa Mayer has around 20 acquisitions to her credit that are unlikely to add to the top line any time soon. But the efforts to turn around the company are in full swing with its R&D operations being revitalized.

Mayer is focused on apps that delight consumers, which is the way to go considering that Yahoo has neither a device nor an OS that it owns or controls. Once it charms users, it will draw advertising dollars and may also be able to get into a partnership with someone like Apple. Everything makes sense.

But it’s also true that its earnings are being held up by nothing more than its Asian investments and share repurchases. So the company is clearly under strain and it’s not clear how long it can withstand the pressure. More so because the runup in share prices means raised expectations.

The repurchase of Daniel Loeb’s shares at market value did not go down well with many, especially considering the fact that Mayer’s initiatives are yet to yield results and yet she is parting with cash. Moreover, an insider sale of this volume tends to indicate that the shares are fully valued.

It was another great week for Facebook, which finally hit its IPO price. But other technology companies did not do too badly, either.



Last Week’s Performance

6 month performance






















This week-

The International Trade Commission (ITC) has stated that it will rule on Samsung’s alleged infringements of several Apple patents this week. It will also say whether the infringing devices should be banned. The patents in question deal with the design, touchscreen technology and the technology for connecting headphones. In October last year, Apple received a favorable initial ruling on four patents, while its other allegations were set aside. , NVIDIA Corp (NVDA - Free Report) and Computer Sciences Corp report this week. Catch our previews in the “Earnings Preview” section.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Apple Inc. (AAPL) - free report >>

NVIDIA Corporation (NVDA) - free report >>

Facebook, Inc. (FB) - free report >>

More from Zacks Analyst Blog

You May Like