Windows 8 might not be enough to keep Microsoft above a softening PC market, Dan Niles of AlphaOne Capital said Wednesday on CNBC.
On “Fast Money,” Niles argued that portfolio managers had held Microsoft stock in anticipation of a dividend increase, which happened, going from 20 cents to 23 cents per share.
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“I think now that that’s behind us, you have to deal with the fact that they’re going to have to report earnings soon and guide,” he said. “And if you think back to what we’ve heard already, Intel had a revenue shortfall of $1 billion in the quarter. You had Western Digital and Seagate in disk drives cut their forward numbers. Dell and HP, obviously, a month or so ago, they came out, forward numbers went down there as well.
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Niles noted that Windows 8 was facing stiff competition from smartphones and tablets — factors that did not exist when Microsoft released its Windows Vista operating system in 2007. Now, companies such as Apple, Google and Samsung are players that challenge Microsoft.
“So, in general you’re looking at a stock that’s up in line with the market where the end markets are actually getting worse,” he said.
Trader disclosure: On Sept. 26, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long MSFT; Tim Seymour is long F; Brian Kelly is long GLD; Brian Kelly is long QQQ; Brian Kelly is long FCX; Brian Kelly is long Copper; Brian Kelly is long Wheat; Brian Kelly is long Corn; Brian Kelly is long Soybeans; Brian Kelly is long DBA; Brian Kelly is long RIA; Brian Kelly is long TIP; Dennis Gartman is long CS; Dennis Gartman is long AS; Dennis Gartman is long GOD; Dennis Gartman is long NAT-GAS; Dennis Gartman is short CRUDE; Dennis Gartman is short EURO; Dennis Gartman is short YEN; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy’s wife, Linda Snow, works at MRK.
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