Google Shows Off Chrome OS in Technical Preview

Google's (GOOG) entry into the Operating System space is at least a year away, but the Internet and Search behemoth showed off a technical preview of what they've been tinkering with to an audience of journalists and "techies".

Expanding on the browser that Google released called Chrome, and its currently advertised 40Million user install base, the operating system advanced by Google is a means to the future of cloud computing. All applications on Chrome OS will be web apps and all data is in sync with the cloud at all times. Basically a user would be able to log into any Chrome OS computer and treat it like your own. The Browser is the key.

Major targets for Google with this system are speed and security. With all major components of the OS, either incredibly lightweight or in the cloud, the time to get a computer up and running will be drastically reduced. The demo netbook that Google showed off was ready to go in 7 seconds. The security model Google is working on with Chrome OS is also designed for the Internet age. Building specific locks to the core of the system from applications will allow Chrome to remain unharmed by viral and malicious programs. The Internet connected self-update and synchronization system will essentially allow Chrome users to always have the most current and safest version of the operation system. If something does go wrong, Chrome can re-install a clean version right on the spot and re-sync all the user's data, almost transparently. Some advanced thinking from a company with a lot of advanced thinkers.

But, how will it all work, what about the powerful desktop applications the computing public has grown accustomed to? Well, initially Chrome is situated for a secondary computer, Internet connected for on the go work, like the netbooks and smart-phones of today. As users get more accustomed to living in the "cloud", it is Google's hope that Chrome can grow into larger and more advanced hardware. Internet technologies have also come a long way in the last couple of years, allowing for far richer web applications than in years past. That alone makes the web app only Chrome a solution to think about, as increasingly more work, social and play is done online.

So, what's in it for Google, and more specifically Google's investors? Well, the long-term battle on several fronts between Google and Microsoft (MSFT) just got a lot more interesting with today's demonstration. Netbooks are the fastest growing computer segment, according to several analyst and consumer measurement reports, and it is a field now dominated by Microsoft, first with Windows XP, and now, or so the hope is, Windows 7. Since Chrome OS is open-source and will be free to manufactures, the Zero price point will put a lot of pressure on the folks from Seattle. But to Google, this is the start of a next generation of cloud-only computing users, a part of the business, where from an infrastructure stand-point Google is dominant. The company can afford to guide development here making nothing from it, but enabling a generation of faster, and more secure web surfers, who'll in turn be more trusting of the cloud, and in turn more receptive to tailored Google advertisements .

There's that buzzword again, the cloud. Google, like other giants in the tech space, want to be the big fish in the cloud business. There are other companies that would focus on the corporate market first and get tangible business that way. A lucrative business that will be as well, but Amazon (AMZN), IBM (IBM), Microsoft and HP (HPQ) are all in competition to provide the infrastructure and cloud services for business. Google's reach has always been about advertising to the consumer, and by providing products and services for free, it's building a trust with the consumer that companies rarely have an opportunity to experience. Granted, user data in the cloud brings up many privacy concerns, but Google seems to be able to side-step its way around most issues in that realm, all the while gathering more tailored information about the surfing and shopping habits of its users.

Google's mantra is clearly changing, of course they are still behind the well publicized "Don't Be Evil" but in the new age of computing and business, Google's really striving to serve up "The Perfect Ad". Because the most lucrative ad, is the one that's as tailored as it can possibly be, because it gives the highest potential of a sale, and after all its the sale that drives business. Chrome OS is the next step towards that potential sale.

Disclosure: Author owns GOOG

Hewlett-Packard's Strong Quarterly Showing

Not to be outdone by the 8 Golds won in Beijing by Michael Phelps, or Jamaica's Usain Bolt's 100-200m World Record double, Hewlett-Packard (HPQ) showed its quickness in dealing with eroding economic conditions and the apparent stagnation in technology spending. The company reported a quarter besting analyst expectations in all key metrics, sending shares higher.

The computer company reported earnings of $2.03Billion ($0.80/share and $0.86/share excluding certain costs), which compared favourably to the $0.84/share expected by analysts. On the revenue side, the street wanted $27.4Billion, but got $28Billion, another plus for HPQ. These positive kept coming for Investors in the form of guidance where HPQ was once again ahead of the curve, hitting analyst expectations for revenue and guiding profit a couple cents higher than previously anticipated.

One of the biggest growth areas, Notebooks, rose 26% for HP, keyed by demand in Europe and Asia, as the computer maker battles for the market share top dog prize with Dell (DELL). This was a big driver for the company this quarter in allowing it to post year over year profit and sales increases of 14 and 10% respectively. Now, Hewlett-Packard is a giant global company, and the attractiveness of foreign business in foreign currency has boosted the bottom line to be sure, but I for one like where management is going and what is being said. Even though a rising US Dollar may prove less favourable for foreign business results in the coming quarters HPQ is positioned in a growth area, with popular products.

While its dividend is nothing to write home about, it does pay one, and HP has I feel, significant growth in front of it, and that's where the money will be made on this investment. Even as the stock climbs several percentage points on the results, it is down about 15% from its highs of the past year, which means it'll have work to do through this quarter and next to rally back near those mid $50s ranges. But I feel much more comfortable hearing a CEO like Mark Hurd, coming out saying "We have a significant opportunity" rather than an executive group that complains about the economy or the tight wallet of today's consumer.

View the HPQ WikiChart on Wikinvest

Disclosure: Author holds no position in the above mentioned companies.

Hewlett-Packard Quarterly Earnings Give New Shine to Tech Stocks

Hewlett-Packard (HPQ) had the world of Technology on its shoulders as the market closed Tuesday reporting its final 2007 numbers and gaving guidance for 2008. The all important US technology outlook was in many minds, yet HPQ delivered very well globally. Bullish guidance led by International sales gains powered the stock after-hours to its own set of gains.

Talk of US consumers being weaker, has been well known now from every other previously reporting Tech company but HP's claim that there is strong global marketplace out there gave Technology Traders some hope of continued growth going forward. PC shipments rose 23%, Servers and Storage 9% and the old faithful Printer business rose 4%. For total numbers, the company increased profits from $1.55Billion (55 cents a share) to $2.13Billion (80 cents a share). Driving this increase, was obviously the growth in shipments, but also favourable pricing on components and thus widening margins. The margin metric was one of the keys spurring after-hours buying of the stock.

Looking at HP's successes, one had to analyze what this means for technology. It's clear the marketplace is strong globally, even with weakening in the US, and as such it is the companies with big International operations that will be in the strongest positions. HP affirmed this and let Investors know that International Operations account for 69% of sales, meaning they'll whether those US economic blues much better than most.

Disclosure: Author does not own HPQ

Major Tech Earnings Start Q3 with a Bang Part 1: Intel Beat Estimates, Ups Guidance

The major player in its business segment, Intel (INTC) was looked upon to set a direction for Technology early in this earnings season. And set a direction it did as the companies beat expectations and had its shares move higher in after hours trading. Intel came down the pipeline first, and the computer chip maker left nothing to chance this quarter as sales continued to be strong and CEO Paul Otellini projected further strength ahead.

All things that a market cheers! Intel was able to put a number together this quarter that led it do double digit sales growth for the first time in years. First the numbers.
Income was up to $1.8Billion or $0.31/share vs. a year ago $1.3Billion or $0.22/share (an increase of 40%)
Revenue was up to $10.1Billion, which represented an increase of 15% year-over year.

That all important margin issue, that had plagued Intel for much of the past 12-16 months seems to be forgotten as the company has stepped completely ahead of Advanced Micro Devices (AMD) and into its formerly held dominant market position. Due to heavy price wars with AMD, Intel's margins were dropping quarter after quarter, and with that the stock price went stagnant. However in the past 2 quarters this story changed and Intel proved once again that it has market power when it comes to selling processors. Gross margins at the company rose slightly again and the expectation for the 4th quarter is that Intel will be able to nudge them even higher still above 55%.

Analyst estimates had called for more conservative margin numbers leading to $0.30/share and $9.6Billion. Intel handily beat those figures as demand for the company's products were heavy due to increasing laptop use. The very successful Core 2 Duo line proved a winner again as Computer makers like Hewlett Packard (HPQ) and Apple (AAPL) are stuffing the chips in their systems left and right. A quick look over at Amazon's best selling computers list has 4 Apple machines in the top 5 all sporting Intel's Core 2 Duo chip sets. Hewlett Packard holds 6 of the next 10 spots with 4 Intel powered systems and 2 AMD powered systems.

In all, of the top 15 true laptops on Amazon's list, 12 run on Intel chip sets. Now that's dominance in a sector that is growing much faster than traditional computer desktop systems. The company guided even higher than previously for the 4th quarter, now expecting sales between $10.5Billion and $11Billion; analysts were expecting $10.4Billion.

With the way the computer industry is growing, especially in the laptop sector and emerging markets, it's the hardware that will continue to sell and sell well. While all the fuss has been on piracy when it comes to Software, the makers of the nuts and bolts, so to speak, will continue to be strong. While in the Far East piracy runs rampant as the computer market continues to expand the difficulty involved in illegally copying chip design and computer design innovations is paramount to the tasks involved in copying software. Bottom line is, Intel dominates its marketplace, it is the brains behind the most popular systems being sold today and we are coming to an era of innovation in Computers where customers are becoming excited again about what their systems look like and what they can do. This shines a particularly bright light for the rest of the year and beyond for that company, that more times than not, is truly Inside.

Disclosure: Author is long AAPL, INTC

Markets start October with a Bang as Dow hits All Time High

The rally continues in the wake of the Fed Rate Cut last month and stocks extended gains as the calendar changed from September to October. The Dow hit an all time intra-day high of 14,115 points as the index gained over 190 points. The Nasdaq followed suit with an almost 40 point gain and the S&P held up a 20 point gain. Canadian markets ended with about half the gains of its US counterparts as investors bought stocks across the board bidding the TSX up 100 points. The advance was broad and spanned every sector. Volume was also much heavier than the week prior as investors on the sidelines during the end of the quarter jumped back into the markets to fuel the rally.

Citigroup (C) drifted off its highs late but was up over 3% in the afternoon as it provided an optimistic outlook for the remainder of the year. The financial heavyweight announced that profit fell 60% due to loses in credit and mortgage securities totalled almost $6Billion. Guess the big bank guys weren't as smart of those Goldman Sachs (GS) traders who shorted such monstrous amounts of mortgage investments to cover up and make up hefty losses. Nonetheless investors were pleased as Citigroup told the markets they expect a calendar 4th quarter that would return things to the norm. Goldman gained another 3% to close at $223.

Nokia (NOK) also made headlines, and started the day well down, as it announced the purchase of Navteq (NVT), the navigation software company, for over $8Billion. Nokia shook off the early heavy drop before the market opened and managed to close the day in the green and even hit a 52-week high above $38/share. Nokia hopes to leverage Navteq's expertise in maps and navigation into its future lineup of mobile phones. The loser here apparently was Garmin (GRMN) as its shares fell 10% on investor speculation that it lost the bid for Navteq's service and now faces stiffer competition from Nokia.

New highs were aplenty in Tech stocks as Ebay (EBAY), Apple (AAPL), IBM (IBM), Hewlett-Packard (HPQ) and Google (GOOG) all hit new marks, while Research In Motion (RIMM) and Amazon (AMZN) came oh so close. Google continued its sharp rise adding $15 and crossing the $580/share price mark for the first time in its young public history. As major techs get set to report earnings in the coming weeks it'll be increasing difficult to judge which of those companies are too inflated for their own growth prospects. But now, while the rally is in full swing, investors are coming back into play and buying Technology ahead of earnings and the seasonally strong holiday quarter.

Disclosure: Author is long AAPL, GOOG, GS, C

Market Week ends on a High as Fed and Options Expiration Lead Rally

Markets in North America climbed back amongst heavy losses early in the week as the US Fed cut the Discount Interest rat by half a percentage point. This is the rate that banks borrow from the Federal Reserve. The news sent stocks flying early Friday and the rally held steady in the late afternoon led overall by the Financials.

Positive earnings and a positive outlook from Hewlett-Packard (HPQ), Dell's (DELL) internal earnings audit completion and general bargain hunting helped Technology put the Nasdaq ahead by almost 2.5%. Options Expiration also helped fuel some of the buying as several big tech names hit even strike levels. Whole Foods (WFMI) completed another hurdle in its attempt to acquire Wild Oats (OATS) which in turn made company shares jump 7% and 17% respectively.

Thursday's quick climb from the aftermath of a morning 300+ point Dow drop continued Friday and the major indices almost climbed back to even for the week. The TSX in Canada was also led by Financials but the market saw a 400 point gain close to only 200 by the end of the day. Canadian currency gained strong on the US rate cut news and the Bank of Canada went back on its plan for a rate hike later this fall. The markets in North America are still in uncertain and turbulent times, however Friday showed that on positive news buyers are there just waiting to jump in.

Hewlett-Packard Firing on all Cylinders with Earnings Beat

Hewlett-Packard (HPQ) reported today after the close. The results were nothing but positive as the largest computer maker continued to take market share from its main rival, Dell (DELL). The computer maker reported $0.71/share earnings excluding items on $25.4Billion in revenues.

Both figures topped estimates and the revenue number showed top-line growth of 16%. That's good news for HP investors, however the better news came with the company forecast for next quarter. Forecasting 2-3 cents higher than previous analyst estimates showed that indeed all businesses are doing very well and growth is set to continue worldwide. Shares of the company hit a 52-week high of $49 recently and have not fallen as hard as other growth tech names such as Apple (AAPL) or Research In Motion (RIMM).

The growth in PC shipments for the company shows that it is on par with high growth Apple machines in the sector as both companies continue to leave Dell in the dust. IDC market research reports showed recently that HP increased its PC shipments by over 35% year over year. Dell is trying desperately to lure customers back but HP is working very well in all channels and is the PC of choice while Apple is enjoying its great success with Macs.

The cost cutting plans implemented by management a couple years ago are paying dividends now as HP competes in all PC sectors and is widening its market share lead across the globe. Even the printer division is doing better as market share is being taken from Lexmark and Dell here also. HP trades at a forward P/E multiple in line with IBM and several points cheaper than Dell. This is a bargain of a growth technology company with the Price-Earnings-Growth ratio now under 1.

The market trends currently don't support heavy bullish buying as credit fears and liquidity problems sweep across all sectors but a winner is clearly here in HPQ and its difficult to stand idle when solid growth like this is available for such a discount. Hewlett-Packard proved in its latest quarter that it is the biggest and best PC company in the world. Investors should take notice.

Disclosure: Author is long AAPL and holds no position in HPQ, DELL, RIMM