Analyst Concerned About Microsoft, Intel on China Weakness

So it is not surprising that analysts and investors are adding Microsoft on a growing watch list, especially since China may not be able to bailout Microsoft.

Analysts predict that Microsoft will post a sales growth of less than 5 percent from a year ago for the second quarter. A article published by Bloomberg suggests that China can't flatten the valley created by slow demand in the U.S. and Europe, and may even worsen it by a more and more pronounced weakness in the market. One analyst called the outlook for this year "lousy" while another said that the PC industry may struggle to grow at all in 2012.

What makes this quarter rather interesting is the fact that there is a certain doubt that Intel will be doing well - or, at the very least, better than AMD. Typically, AMD has been much more affected my market swings than Intel, as Intel's market power often allowed it to balance out downturns. This time, however, there are plenty of voices that predict that Intel may be hit much harder than in previous times. There is also doubt that Intel will admit that it has been hit. Bloomberg quoted one analyst from Susquehanna International Group who believes that Intel will show optimism simply to keep its customers ordering products.

"Intel realizes that their view of the market influences the market because they are the market," said Susquehanna's Chris Caso. "They're trying to convince customers, investors and eventually the consumer that they're right." Intel will report Q2 results on Tuesday, AMD will follow on Thursday. Microsoft will reveal Q2 results on Thursday as well.

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  • amuffin
    Intel would never manufactuer their chips in China, if they did, next thing you know there's going to be a copy!
  • x4dm
    amuffin... so you are saying Dalian, China is not in China?
  • amuffin
    x4dmamuffin... so you are saying Dalian, China is not in China?

    Didn't notice that...*facepalm*