Intel in particular may post strong earnings.
Intel Corporation (NasdaqGS: INTC)
This is one stock that has remained relatively stable. From highs of $27 and above, the share prices fell to a few cents above $12 during the economic depression, but staged a quick recovery at between $19-20. A strong Intel Q3 is expected (courtesy Matthew Goldstein, Reuters).Third quarter company earnings are scheduled for Oct 13 2009.
Advanced Microdevices (NYSE: AMD)
This stock has seen some wild swings relative to its competitor Intel. It dropped to 1.62 at the height of the recession in what was almost a free fall. It then recovered and is current trading 3-4 times its 52 week lows (courtesy Yahoo Finance). Third quarter earnings are scheduled for Oct `15 2009, close on the heels of its competitor.
Bubble or Real?
An investment in such a stock is always tricky, for one never knows when the bubble will burst. Take the case of another tech stock, Conexant systems (CNXT). It traded for a little over a dollar on the eve of its second quarter earnings. True, alot of companies witnessed gains of approximately 50% following the last quarter earnings, but in the case of Conexant the increase was exponential. From a little above a dollar, the stock price touched almost $4, when until a few days back the prices dropped back sharply to $2.50. It is again on the way up, but for how long?
The Question to Ask Is
Were there any drastic changes in the case of AMD and Conexant that led stock prices to double or triple in less than two months? Sometimes all it takes is an analyst's buy recommendation. The Advanced Microdevices recovery has been meteoric following a buy recommendation (courtesy SmarTrend(R) Spotlight via COMTEX). Intel's resurgence was ascribed to the increased demand in Asia's healing economies, and even then gains were modest.
Another NASDAQ Stock Synergetics (SURG)
Synergetics is not a tech stock, but a surgical equipment manufacturer. The earnings are scheduled for the same day as AMD. It is a relatively lower priced stock (less than a dollar and a half), so profits are possible with relatively small investments.
The Current Economic Climate
Here is an important observation. No matter how strong the gains are during earnings season, end of the year selling is bound to catch up and drag prices down again. That makes Q3 earnings trickier to handle for investors. For companies who do not post good earnings, the chances of recovery are bleaker, at least for the short term, say 2-3 months until the year end is up.
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