Microsoft Stock ( NASDAQ:MSFT )
At 12:30 p.m. ET, Microsoft stock had dropped by 4.5%.
Microsoft ( NASDAQ:MSFT ) is rather protective relative to other IT companies, thus, such a one-day decline in Microsoft Stock share price was unusual. Several other tech giants, including Advanced Micro Devices (AMD), were substantially lower, with the latter’s announcement of impending weak PC sales for the September quarter pointing to a similar weakness for Microsoft’s PC-related business.
Further, bond rates climbed after a positive employment report, which was terrible news for the IT industry.
What’s the Reason?
AMD preannounced its revenue for the September quarter last night, which was far lower than expected. The $6.7 billion AMD projected on its results call in August is expected to be closer to $5.6 billion.
In this case, AMD’s “client” (or computer) section is to blame. Sales of client chips are predicted to plummet, with a 53% quarterly decline and a 40% annual decline forecasted. A lot of demand for personal computers was pushed up because of the epidemic. PC sales have stalled due to the current economic climate of rising inflation and looming uncertainty. Though consumer PC sales are likely less than these data suggest, manufacturers may be clearing out stock in preparation for releasing new chip architectures from AMD and its competitors later this year.
This is terrible news for Microsoft ( NASDAQ:MSFT ) since the company makes a lot of money from selling its own Surface computers and tablets and licensing its Windows operating system...
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