For Immediate Release
Chicago, IL - January 30, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Microsoft (NASDAQ: MSFT - Free Report ), Apple (NASDAQ: AAPL - Free Report ), Amazon (NASDAQ: AMZN - Free Report ), Alphabet (NASDAQ: GOOGL - Free Report ) and Intel (NASDAQ: INTC - Free Report ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
The Cloud Drives Technology Stocks This Quarter
Analysts and experts have talked at length about the importance of cloud computing and how it would transform the technology sector. But the sense of waiting that underpinned such discussions is now giving way to a sense of arrival.
Several factors are making cloud computing a reality today, the most important of which are an awareness of the resultant cost reductions, awareness of the economic value of processing ever-increasing volumes of data, and recognition of the advantages of sharing resources and having anytime anywhere access to data and information.
Of course, along with all these advantages comes concerns related to privacy and security, which have been further exacerbated by government snooping, gag orders and orders to turn over data in private individual devices or in servers on foreign soil that have in turn made individuals and corporations wary about adopting the cloud.
But technology companies are fighting it out. Microsoft (NASDAQ: MSFT - Free Report ) for one has strongly resisted government demands as have Apple (NASDAQ: AAPL - Free Report ) and Amazon (NASDAQ: AMZN - Free Report ). Alphabet's (NASDAQ: GOOGL - Free Report ) Google has also been vocal in its opposition. It makes perfect sense when you consider that these are some of the biggest cloud computing stocks that also offer computing and other devices. So they have vested interests at both ends of the networks.
Here's a brief glimpse of three cloud companies that just reported December quarter results:
Intel's results this quarter were driven by both the PC and data center businesses. The PC strength was seasonal and unlikely to be sustained.
Although non-volatile memory had the strongest growth rate of 24.8% and will grow even stronger this year, it currently contributes a lower share of revenue, which equates to fewer incremental dollars. Also, the business is poised to benefit from Intel's strength in the server market.
Data center revenue growth of 8% year over year was helped by platform volume growth of 3% and platform price increase of 4%. Intel has new products in the pipeline and will also be integrating some technology it acquired through Altera, so this year may be less disappointing than the last when enterprise softness skewed expectations.
Microsoft has become a cloud-focused company, impressing analysts and investors alike. The company is making the most of legacy workloads that use its software and its all-new Windows OS, while leveraging Office productivity software and enterprise relationships to post record growth in cloud revenue.
The company reported solid cloud results, with Azure revenue growing 93% (95% in constant currency) and compute usage doubling year over year. Its cloud productivity business also saw strong growth: Office 365 commercial revenue grew 47% (49% in constant currency) with seat growth of 37% and monthly active iOS and Android devices more than doubling to 65 million, Office 365 consumer revenue grew 22% (21% in constant currency) with seat growth of 20.9%.
Dynamics 365 paid seats also more than doubled. Nadella promised commercial cloud annualized revenue runrate of $20.0 billion in 2018 and last quarter's $14.0 billion means that Microsoft is definitely on track to beat or exceed the target.
Alphabet doesn't break out its cloud revenue separately although independent market research data indicates that it is well behind market leader Amazon and even runners up Microsoft. In fact after the December quarter results some analysts have started saying that Microsoft has also started pulling away from the pack in its chase of Amazon.
Alphabet's growth should not be discounted however because while cloud and hardware are lumped together right now, its common knowledge that most of its new hardware has been unavailable for a lot of the time. So the 62% growth in this segment seems to be less on account of hardware sales and more of an indication of strength it is seeing in the cloud.
CFO Ruth Porat has said that cloud, hardware and YouTube subscriptions will be "major revenue drivers for Google in the next several years." This will of course require capital investment, something the company can afford given the way the search business continues to rake in cash. Capex was around $3.08 billion last quarter, that's nearly up by a billion dollars and will mostly be spent on data centers to support its cloud business.
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://twitter.com/zacksresearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.