The Zacks Analyst Blog Highlights: Microsoft, Nokia, Google, Intel and ARM Holdings

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Sep 10, 2013, 09:30 ET

CHICAGO, Sept. 10, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Microsoft (Nasdaq:MSFT-Free Report), Nokia (NYSE:NOK-Free Report), Google (Nasdaq:GOOG-Free Report), Intel (Nasdaq:INTC-Free Report) and ARM Holdings (Nasdaq:ARMH-Free Report).

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Here are highlights from Monday's Analyst Blog:

Tech Stock Roundup: MSFT Plunges Again

Last week was an exciting one, with Microsoft's (Nasdaq:MSFT-Free Report) purchase of Nokia's (NYSE:NOK-Free Report) handset business being the top story.

Is Microsoft Throwing Good Money After Bad?

It's hard to put Microsoft's several billion dollar acquisition of Nokia's handset business in a nutshell, but I'll give it a try.

First let's see what Microsoft gets out of the deal. The positive is that the acquisition not only includes Nokia's WP8-based phones, but also the increasingly popular Asha phones that are basically high-class feature phones aspiring to be smart. Microsoft also gets non-exclusive licensing rights to 8,500 design patents and 30,000 utility patents for up to 10 years.

What's more, the Nokia brand name can't be used by Nokia on any new phones that it might want to make until after Dec 31, 2015. Microsoft, on the other hand, can use the name on any hardware products for the next three years and on existing hardware products for 10 years.

And that's not all. Microsoft has also licensed Nokia's mapping technology called Here for four years, which can be used to challenge Google (Nasdaq:GOOG-Free Report) Maps. Microsoft can do all this with roughly a tenth of its off-shore cash, so it's one of the few companies that can afford to take a gamble like this.

Microsoft's decision obviously hinges on its intention to go after the devices market. The decision met with bad press, but is not necessarily a bad move. Microsoft's PC business is melting away, and if it can't find a viable mobile platform, it will be Goodbye Windows – well almost. The consumer and enterprise demarcation is fading with BYOD, and Microsoft needs leverage here.

Microsoft has acquired 36,000 Nokia employees who can be used to further this objective. Its business solutions remain popular at this point and this may be the last chance it has to use them to garner support for its OS. Of course, there remains a significant amount of work to be done, not the least of which is app development.

In the near to medium term, Nokia can only be a drag on Microsoft's results. And the longer term will be determined by Ballmer's successor and his ability to deliver on the "devices and services" strategy.

Intel Plugging Entry Points to the Data Center

Intel's (Nasdaq:INTC-Free Report) Atom chips have a new portfolio. So far they have been known for spearheading Intel's efforts in the mobile segment. But with the latest Silvermont architecture and 22nm manufacturing, they now have the power and efficiency to handle the lightweight workloads of microservers, cold storage platforms (Intel's Avoton SoC) and entry level networking platforms (Intel's Rangeley SoC).

This is a relatively small segment of the market, but of strategic importance, since success here could encourage mobile chip rival ARM Holdings (Nasdaq:ARMH-Free Report) to get deeper into the server market which has been Intel's stronghold. The segment can function on low computing power but requires high energy efficiency, which makes it ideal for ARM architecture.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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