Three tech giants on the move – time to invest?

Confidence continues to creep into the markets, thanks in large part to the rollout of vaccines across the US. President Joe Biden plans to double vaccines as America inoculates almost 50 million people – however the pandemic is still looming.

The Dow Jones index reported a 1.4% increase in the last full week of March with tech and energy stocks at the forefront helping close a turbulent couple of days.

With the recovery on steady, if still uncertain, ground, we look at three leading tech stocks that have already navigated it with some success and are making some interesting moves to prepare for the next stage.

Listen to the latest Digest & Invest Podcast to hear eToro Market Analyst Henry Ward discuss this topic.

Apple unveil iPhone 12 models

Apple recently unveiled its family of iPhone 12 models, which are the first to be compatible with 5G mobile networks.

Analysts are expecting 5G iPhones to trigger yet another massive global upgrade cycle among existing iPhone users.

In late March, the stock settled back to $120, still, Apple investors who bought one year ago and held on have generated a big return on their investment.

A third-party report also highlighted how Apple doubled its market share in India’s smartphone space to 4% in Q4 2020. Shipments of more than 1.5 million units helped it achieve this feat during a difficult time, as the novel coronavirus pandemic sent millions into poverty in India last year.

This could pave the way for Apple to increase its presence in India in 2021.

Looking ahead, analysts are expecting even more upside for Apple in the next 12 months with some analysts covering the stock predicting it may reach $155. But there is much in the recovery story yet to play out that could scupper these ideas – at least in the short term.


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Microsoft may be poised to buy its next ‘community’

Microsoft seems to be on a spending spree. After just closing the deal on its $7.5bn purchase of video game publisher Bethesda, it is now reported that the software giant is in talks to acquire messaging platform Discord for $10bn or more.

According to reports, Microsoft and Discord are rumoured to be in exclusive talks and could complete a deal next month, assuming the negotiations don’t fall apart.

While not exclusively used by gamers, Discord has been one of the most popular communication tools amongst the gaming community for years and the pandemic has only increased its popularity as people look for ways to stay connected with their friends.

Microsoft, which last year sought to buy social-media app TikTok and held talks to acquire Pinterest, is rumoured to be shopping for assets that would provide access to thriving communities of users.

Microsoft seems an easy buy for investors, particularly as the technology sector has been under a little pressure of late. The company has seen accelerating growth and improving margins and with further potential acquisitions on the horizon, even at $235, the stock may have further to go.


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New Intel CEO sets out ambitious plans

Intel’s new chief executive is feeling ambitious, leaving analysts pondering whether the company can follow through on its big plans.

Following a period of setbacks for the tech giant, Pat Gelsinger recently took over the top job. In his first public webcast as the new CEO of Intel, Gelsinger surprised investors by announcing a new direction for the US chipmaker.

Instead of continuing to outsource manufacturing, the company is expanding its in-house production. The new strategy, dubbed IDM 2.0, is an updated version of its integrated device manufacturing model. It includes an estimated $20bn investment to build two new factories in Arizona immediately, in an attempt to reduce some of the semiconductor industry’s reliance on Asian manufacturing.

This in-house operational expansion – the first in decades — takes a page out of Apple’s book. The iPhone maker dropped Intel as a supplier last year and began producing its own processors.

The new ambitious plan also includes the launch of Intel Foundry Services to help it become a major provider of foundry capacity in the US and Europe.

There seems to be plenty of risks associated with the new strategy. The new capacity planned will take a few years to build and does not address the current global chip shortages.

But when they are built, Intel is clearly hoping as part of its turnaround, it will play a big new role on the worldwide semiconductor-manufacturing stage and lead a rebalancing of the global supply chain. Investors are also interested in the new leadership’s direction – it’s stock rose 30% in the first three months of the year.


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