Market Pulse: Does Microsoft Have a Chromebook Problem?

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    Microsoft (MSFT) issued weak guidance last night. The outlooks for consumer PC and business PC guidance were both disappointing.

    This is interesting and potentially negative for two reasons:

    1. Research from firms like Gartner have shown strong demand recently for laptops and PCs as more people work from home.
    2. Multiple news stories in the last 1-2 weeks have noticed rising success of Google Chromebooks.

    Google’s free Linux-based operating system appears to be gaining market share schools. There also seems to be a growing push for Chromebooks in the enterprise space as Dell, Lenovo and Samsung push new computers.

    No one else seems to be connecting the dots yet, but this could be a trend to watch. MSFT is trying to grow in the cloud with services like Azure, but still relies heavily on traditional PC sales and Windows. A challenge from GOOGL in the PC market might not be priced in.

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    David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.