Earlier this week Intel slashed its fourth-quarter outlook claiming that it would be harmed by the hard disk drive (HDD) supply shortages related to flooding in Thailand. Yesterday the word was out that AMD might suffer a similar fate.
But according to the International Business Times, the development could be bad news for Vole as it could cast a shadow on Microsoft's client revenues.
While Caris analyst Curtis Shauger said the impact on Microsoft's fourth quarter results should be negligible, he expects that the March and June 2012 quarters will face a judgement day.
He said that Intel's near term weakness seems to be centred on inventory reduction and not sell-through so there will be little effect on Vole at the end of this year. But, he warned that there would be a risk to Volish client revenues and, as a result, Wall Street profit estimates.
Shauger warned that all sorts of problems will prevent Microsoft's mature, core segments such as Client and Servers from growing sustainably much beyond mid single digits.
To make matters worse, all the cash that Microsoft is investing trying to get into new markets will create a big hole in the balance sheet.
At the very best Microsoft's share price is going to stay the same, at $27 per share. Microsoft shareholders are miffed that the outfit has been trading at a more or less consistent share price for too long. This time it is forces that are beyond Steve Ballmer's control which are causing the problems.