Share prices for many large, multinational technology companies have struggled against the headwinds of a rapidly declining euro, but the good news is that languishing share prices may have created worthwhile opportunities in stocks such as Microsoft (MSFT), Intel (INTC), Oracle (ORCL) and Salesforce (CRM). This afternoon’s quarterly report from Oracle (ORCL) may turn out to be a good way to gauge such opportunities.
Oracle investors may find a pleasant surprise awaits in the coming days. Since shares of ORCL have drifted lower relative to the NASDAQ 100 (QQQ) to the tune of a rapidly declining euro, investors may find share prices at favorable values. It appears that at least some investors have begun quietly accumulating shares ahead of earnings. This kind of activity is one possible explanation for yesterday’s gap-up in prices.
A signal like this often means that the shares will outperform the market at large over the coming month. That shouldn’t be too hard to do. If investors like the news, then Oracle’s shares should see a five percent jump based on option-price forecasting. If such a jump were to be followed by euro-friendly sentiments from the Fed on Wednesday, the stock price could further lift in the days that follow.
Oracle currently holds the top position in database management systems (DBMA) market. With spending on IT infrastructure projected to increase 2.4% this year, Oracle is in a good spot for growth. Oracle has done well in its cloud business and will continue to benefit as companies seek to manage their businesses through the use of cloud suites. Oracle faces competition in all of the markets which it operates (database, storage, and cloud computing), and may experience pricing pressure in the future as more companies make strategic alliances to sweeten their offerings and provide “one-stop-shops” for all services from marketing to records management.
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One market in which Oracle may take second place is Marketing Services. Adobe’s marketing cloud has the potential to be the top tool used by creative professionals to analyze customer data and influence customer experiences. Adobe has entered into a partnership with IBM and, in the near future, the firm will enable companies to market through the “internet of things” by reaching customers through ATMs, car dashboards, vending machines, and other appliances.
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