IBM and Intel: Earnings Report Anticipation

The long-standing giants of the technology sector, IBM and Intel, are preparing to release their earnings reports for the current period. Both companies, although considered 'Old Tech,' still produce influential figures on the stock market and have investors closely watching their performance. IBM is expected to report on Wednesday and Intel on Thursday, unveiling their latest financial health to the public.

IBM's Financial Outlook

IBM, once a heavyweight in the technology industry, hasn't seen its stock prices reach an all-time high since April 2013, when shares were priced at around $213-215. Despite this, there's optimism in the air as technical analysis indicates a potential uptick in the company's growth. IBM is projected to report revenues of $17.3 billion and earnings per share (EPS) of $3.78, marking year-over-year growth of 4% and 5%, respectively. Analysts are paying special attention to IBM's fourth quarter, historically its strongest, to discern potential future growth.

With the sector's shift towards software, IBM seems to be adapting by increasingly focusing on its software services, with the Kyndryl spinoff making IBM even more refined in its offerings. Despite a history of declining revenue, projections now suggest modest growth over the next few years. There's a chance IBM may also announce the resumption of its share buyback program, given its stabilizing free cash flow and its ability to sustain a generous dividend yield of just under 4%.

Intel Faces a Tough Road Ahead

Intel's story is somewhat different. The company's last all-time high was in September 2000, and it's facing a tough couple of years, with substantial declines in revenue and EPS. However, there's hope as the company is expected to report significant year-over-year growth with $15.1 billion in revenue and $0.45 in EPS. Investors are keenly observing Intel's PC business recovery but are also intrigued by its fledgling foundry business, which could benefit from the geopolitical shift in semiconductor manufacturing.

Despite this, Intel is grappling with negative free cash flow, a direct consequence of necessary capital expenditure to increase manufacturing capacity at a financially challenging time. Intel has not repurchased any stock for several quarters and has slashed its dividend to alleviate financial pressures.

Both IBM and Intel are ancient titans in the world of technology, yet they appear to be finding new paths, with their recent stock price surges indicating a possible return to favor. The upcoming earnings reports will likely shed light on whether these companies can fully leverage the current tech trends and set a sustainable course for future success. Investors and analysts alike will be watching closely for any signs of substantial business model shifts or improvements in their fundamental strengths.

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