Tag Archives: ORCL

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

Compare Brokers

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

Compare Brokers

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

Compare Brokers

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

Compare Brokers

Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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VMware: Stay Long

VMware (NYSE:VMW), the company best known for its invention of so-called “virtual machines,” or the ability to use software to allocate operating system resources from a remote server to a third-party client, deserves a lot more love than it’s getting, in my opinion. The company posted a solid Q3 underlined by fantastic billings, a top-line beat, and a deluge of free cash flows. Still, despite the good news, VMware’s stock practically stayed flat after the earnings announcement.

It’s been a tough week for the technology sector. The NASDAQ suffered a sharp reversal on the second-to-last trading day of November as tech stocks sold off and investors piled into beaten-down value names in the retail sector. The beginnings of a trend are clear: as we head into 2018 and the S&P 500 continues to shatter records daily (the most recent rally being fueled by supportive Fed commentary), value stocks (and stock selection itself) are top-of-mind topics.

VMware has proven itself as a unique value play – not words commonly used to describe a stock trading at ~24x P/E (though as I mention in a prior article, VMware generates much more free cash flow than GAAP earnings, and its free cash flow valuation is more in line with a cheap 18x multiple – a bargain, especially after this quarter’s cash flow results). Like industrial value names, VMware is a company that’s had to reinvent itself. Back when cloud computing was just a research project, VMware reigned king as client-server computing was the bedrock of enterprise IT, with each company maintaining its own servers and using VMware’s vSphere hypervisor to partition computing resources to “thin clients” – a fancy name for the desktop terminals that fill office desks, but with no computing guts themselves. These days, however, more and more workloads are being shifted to the public cloud, primarily into Amazon’s AWS (NASDAQ:AMZN), and out of corporate-owned “on-premise” data centers.

But to keep itself from becoming irrelevant, VMware has initiated a partnership with AWS to offer VMware Cloud on AWS, which eases the burden on CIOs who want to retain their existing VMware infrastructure while migrating into a public cloud environment. Having rebranded itself as a cloud-friendly vendor that can support “hybrid cloud” environments, VMware is experiencing a renaissance, with revenues growing at double digits for the second sequential quarter – which is fairly uncommon for a large-cap legacy IT company with ~$8 billion in revenues that is dealing with revenue declines in its out-of-vogue products. While Oracle (NYSE:ORCL) isn’t a perfect comp because it’s 4x the size of VMware, Oracle is also a company that is trying to shift from its on-prem legacy to a cloud environment – and Oracle grew only 3% y/y in its last quarter. VMware, by contrast, has really gotten into the swing of things with 21% growth in billings.

The key point to note: VMware is a value name with tremendous valuation support in its free cash flow; but unlike a traditional industrial value play, its new found strength in cloud is supporting double-digit revenue growth and massive (50%-plus) cash flow growth. Tech investors are starting to pay more and more attention to value-oriented growth names, and VMware fits the bill perfectly. The fact that the stock reacted so calmly to a great quarter is indicative of an opportunity to buy. I’ve been long on this name for years, sticking with it through the Dell-EMC tracking stock drama and am retaining a price target of $147 (20x EV/FCF) on the company. Even if (really, when) the company hits that mark sometime in the next year, I’m still holding my shares for the long haul, as VMware’s dominance in the enterprise datacenter (and now its newfound prominence in cloud-based datacenters) merit it a market capitalization in excess of $100 billion (more akin to Oracle and Cisco (NASDAQ:CSCO), other datacenter juggernauts), whereas its valuation now only sits at a polite $49 billion.

Q3 download: remarkable performance across all metrics, especially free cash flow

VMware posted $1.98 billion in revenue (+11% y/y) in Q3, beating out analyst expectations of $1.96 billion. License revenues grew 14% y/y to $785 million, while the remaining bulk of the revenue was derived from maintenance and support services. It’s important to note that this is VMware’s second consecutive quarter of double-digit revenue growth – in Q2, VMware posted 12% growth, while Q1’s growth rate was only 9%. It’s clear that beginning in Q2, VMware began picking up additional steam on the back of its new product offerings.

Figure 1. VMware revenue results
Source: VMware earnings release

As highlighted by the title of this article, however, it’s billings that stole the show (at least in terms of top-line metrics; cash flow growth is VMware’s true prize jewel). As a refresher, like most software companies, VMware’s long-term and subscription deals are booked into deferred revenues and recognized as revenue ratably over time. The sum of revenue plus the change in deferred revenue is referred to as “billings” in the quarter. Billings, rather than revenue, is a clearer picture of the volume of deals closed in a quarter – and in Q3, VMware had a fantastic billings quarter, with total billings of $2.1 billion growing 21% y/, as shown in the chart below:

Figure 2. VMware billings results

Analysts had only called for $2.0 billion in billings (+14% y/y). Given the fact that billings is the longer term yardstick for revenue health and that VMware smashed billings expectations by seven points, I’m surprised that the stock reacted so casually to the billings beat, choosing instead to focus on the thinner beat on revenues.

VMware’s deferred revenue balance grew to $5.6 billion in the quarter ($3.5 billion in short-term and will be recognized as revenue within the year; $2.1 billion is longer term), up 11% y/y. Software maintenance continues to form the bulk of deferred revenues, consisting of the agreements that customers sign with VMware to receive support and software upgrades over a predetermined term.

One more product-related note: VMware also announced that Gartner (NYSE:IT) has proclaimed it the largest software vendor of hyperconverged infrastructure (HCI), based on sales of VMware’s vSAN. Though VMware doesn’t break out sales by product, I must confess that, at least where it concerns HCI, I’m partial to Nutanix (NASDAQ:NTNX) and consider Nutanix the leader of that space. Nutanix, coincidentally, reported earnings on the same day as VMware and blew away analyst expectations, showing at least that there’s room in the field for two. HPE’s SimpliVity (NYSE:HPE), which the crisis-ridden company purchased earlier this year for $650 million, seems to be a very distant third.

Cash flow in focus, supporting VMware’s valuation

Now that we’ve established VMware’s top line metrics are trending strongly, we can turn to the major reason most investors buy VMware: its cash flow.

Cash flow expansion was driven by top-line growth as well as improvements in opex spending; more specifically:

Sales and marketing expenses dropped to 30.7% of revenues, down from 31.7% in 3Q17 General and administrative expenses dropped to 8.9% of revenues, down from 10.0% in 3Q17

VMware improved its operating margin by 2.1% to 23.5% (up from 21.4% in 3Q17). That might sound like a small amount, but at VMware’s revenue scale, two points is more than $40 million – a good chunk to improve earnings by.

Cash flow expanded in tandem. Operating cash flows in the quarter grew 56% y/y to $970 million, and after netting out $59 million of capex, VMware was left with free cash flow of $911 million, up 54% y/y.

Figure 3. VMware free cash flow bridge
This represents a 46% free cash flow margin, among the highest in software and among large-cap companies in general – which proves a salient point about software companies: in the startup phase (or even in a more mature growth phase), software companies might spend a lot on sales and drive massive losses to spur growth, but once they reach VMware’s size, these businesses become cash cows.

In the nine months year to date, VMware has generated $2.2 billion in FCF, representing a 39% margin to YTD revenues of $5.6 billion. Given that in the prior year’s YTD period, VMware generated only $1.8 billion of FCF on revenue of $5.1 billion (a 36% margin), VMware is driving cash flow margins in the right direction.

It’s no secret that VMware is headed in the direction of $10 billion in annual revenues, as its new product initiatives give it access to cloud-based deals that weren’t open to it before. At this scale (which the company should reach in 2-3 years, given its current growth trajectory), VMware would be generating $4 billion in free cash flow annually (assuming its 40% FCF margin holds; in all likelihood, this margin would expand steadily over time).

Compared to VMware’s current $49 billion market cap and $42 billion enterprise value (the company has ~$7 billion in net cash), VMware only trades at a ~10.5x EV/FCF multiple on its hypothetical future cash flow. For the forward-looking investor who believes in VMware’s growth, this cash flow expansion potential makes the stock’s current ~17x FCF multiple (based on FY17 FCF of $2.4 billion) seem like a bargain.

To sense-check VMware’s current valuation against other value yardsticks, the company also trades at a 5.0x EV/FTM revenues multiple (based on a forward-twelve months revenue estimate of $8.2 billion, applying VMware’s growth linearity to its trailing revenues) and 24x P/E, based on analyst consensus FY18 EPS of $5.07 as reported on Yahoo Finance.

Not the cheapest of stocks, but VMware is a software play with the best elements of growth and value.

Stay long on VMware. Very few software stocks are “sleep at night stocks” because so few of them ever reach VMware’s scale (the only other such stock I can think of is Salesforce.com (NYSE:CR), another entrenched leader but in the frontend application software space, generating tons of cash flow). Based on the record-setting levels of the NASDAQ and investors’ general jitters on tech’s overvaluation, it’s these kinds of stocks that the market will turn to in 2018.

Disclosure: I am/we are long VMW, NTNX.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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7 AI Stocks to Buy to Join the Next Technological Revolution

The artificial intelligence (AI) revolution is picking up speed. Before we know it, AI will be part of our everyday lives. “We are at a pivotal point for its adoption today due to the availability of big data, high-powered computing and advances in algorithms — which all make AI cheaper and faster to implement,” says JP Morgan analyst Stacy Pollard.

She calculates that the AI-related hardware, software and services market could hit $58 billion by 2021 from just $12 billion this year. Indeed, market experts say artificial intelligence will lead the next wave of economic growth and productivity for at least the next couple of decades.

Here, I take a closer look at seven top stock ideas with big AI exposure. To find the best investing opportunities in AI right now, I pinpointed seven stocks with a “Strong Buy” consensus rating from the Street’s top analysts.

These are analysts with the highest success rate and average return. By limiting the ratings to only top analysts, I was able to cut out analysts with poor track records. These “Strong Buy” stocks are also more likely to have big upside potential. Of course, Nvidia Corporation (NASDAQ:NVDA) is a great AI stock, but it only has a cautiously optimistic Street outlook. For this reason I focus below on these more bullish stock picks.

Top AI Stocks to Buy: Facebook (FB)

Top AI Stocks to Buy: Facebook (FB)investorplace.com/wp-content/uploads/2017/12/ai-1-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/ai-1-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/ai-1-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/ai-1-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/ai-1-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/ai-1-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/ai-1-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/ai-1-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/ai-1-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/ai-1-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/ai-1-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/ai-1-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

JP Morgan recently pinpointed Facebook Inc (NASDAQ:FB) as one of its top 5 AI stock picks: “Mark Zuckerberg considers AI to be one of the company’s 10-year bets, and believes that AI should replicate — and exceed — human senses such as vision and hearing so that FB is better able to serve users. … FB is working on applying computer vision techniques to organize content and provide the ability to classify live videos in real time” the firm explained.

Five-star JP Morgan analyst Doug Anmuth assigned a buy rating and bullish $225 price target to FB last month (31% upside).

FB is not short of Street support; in fact, the stock boasts 28 buy ratings in the last three months alongside 1 hold rating and 1 sell rating. With an average analyst price target of $208.59, analysts are predicting upside of 21% from the current share price.

Also note that FB has just received its highest price target of $240 from MKM Partners’ Rob Sanderson. He cites FB’s “surprisingly strong Q3 topline” and says the consensus of an expense ramp looks overly aggressive.

Top AI Stocks to Buy: Oracle (ORCL)

Top AI Stocks to Buy: Oracle (ORCL)investorplace.com/wp-content/uploads/2017/12/ai-2-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/ai-2-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/ai-2-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/ai-2-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/ai-2-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/ai-2-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/ai-2-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/ai-2-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/ai-2-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/ai-2-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/ai-2-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/ai-2-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Database giant Oracle Corporation (NYSE:ORCL) uses AI and machine learning across many parts of its cloud applications. Most notably, Oracle is now using AI and machine learning to automate administration of its latest Oracle Database 18c.

And with this new self-driving database technology, the company has created the world’s first autonomous cloud.

“This is the most important thing we’ve done in a long, long time,” states ORCL CTO Larry Ellison. “The automation does everything. We can guarantee availability of 99.995 percent, less than 30 minutes of planned or unplanned downtime.”

The cloud eliminates human labor, human error and the need for manual tuning.

This ‘Strong Buy’ stock has received 16 buy ratings and 3 hold ratings in the last three months. Given that the stock is currently trading at $48.40, the $59.22 average analyst price target translates into upside potential of 22%.

Drexel Hamilton’s Brian White has a buy rating and $62 price target on the stock. He believes the new innovations “can take the company’s cloud portfolio to a whole new level.”

Top AI Stocks to Buy: Twilio (TWLO)

Top AI Stocks to Buy: Twilio (TWLO)investorplace.com/wp-content/uploads/2017/12/ai-3-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/ai-3-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/ai-3-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/ai-3-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/ai-3-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/ai-3-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/ai-3-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/ai-3-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/ai-3-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/ai-3-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/ai-3-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/ai-3-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Cloud communications app maker Twilio Inc (NYSE:TWLO) recently reported stronger than expected Q3 results and it had a better than expected Q4 outlook. As a result, analysts are feeling bullish on the stock’s potential to play catch up following a year of meaningful under-performance.

Top analyst Brian White says, “Based on our 2017 revenue estimate, Twilio holds less than 1% share of this $45.4 billion market and has a big opportunity ahead of it.” And part of this “catch up” could stem from the stock’s growing AI capabilities.

In October, Twilio announced the general availability of its Speech Recognition capabilities. This “enables users to convert speech to text and analyze intent during any voice call,” according to JP Morgan.

The firm adds that “Twilio’s Automated Speech Recognition uses Google’s Cloud Speech API, which supports various languages.” As a result, JP Morgan also lists Twilio as one of its top 5 AI stocks.

In the last three months, analysts have published 7 buy ratings and 1 hold rating on Twilio. These analysts are predicting (on average) big upside potential of TWLO of over 50% from the current share price. Given this potential, I believe this is a top stock to keep a close eye on over the next few months.

Top AI Stocks to Buy: Palo Alto Networks (PANW)

Top AI Stocks to Buy: Palo Alto Networks (PANW)investorplace.com/wp-content/uploads/2017/12/ai-4-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/ai-4-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/ai-4-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/ai-4-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/ai-4-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/ai-4-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/ai-4-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/ai-4-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/ai-4-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/ai-4-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/ai-4-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/ai-4-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Palo Alto Networks Inc (NYSE:PANW), a next-generation security platform company, claims that effective machine learning can help prevent malware and protect endpoints.

“The most promising weapon in the endpoint security arsenal is machine learning, with its ability to quickly learn, make instant decisions and enable rapid response to prevent threats rather than dealing with them during execution or after the fact” PANW states in a report.

In light of this, PANW uses machine learning in Traps, its advanced endpoint protection solution. Traps is already drawing attention; CRN news named it the “Overall Winner & 2016 Product of the Year”.

Overall, Palo Alto has received 16 buy ratings and 4 hold ratings from the Street in the last three months. We can see that the average analyst price target of $173.89 suggests this stock has upside potential of over 20%.

Just recently, on Dec. 4, William Blair analyst Jonathan Ho upgraded PANW from hold to buy. He says the company can widen the “competitive gap” relative to peers.

Top AI Stocks to Buy: Amazon (AMZN)

Top AI Stocks to Buy: Amazon (AMZN)investorplace.com/wp-content/uploads/2017/12/amznai-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/amznai-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/amznai-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/amznai-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/amznai-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/amznai-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/amznai-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/amznai-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/amznai-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/amznai-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/amznai-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/amznai-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Last week, Amazon.com, Inc. (NASDAQ:AMZN) held its much-hyped cloud conference AWS re:Invent 2017 in Las Vegas.

The company unveiled a host of new AI-based products, including Amazon Translate, a service for translating text from one language into another. Andy Jassy, the leader of Amazon Web Services, also highlighted how AWS is crushing its rivals in its breadth and depth of services.

Following the five-day event, analysts quickly ramped up their price targets. Five-star Oppenheimer analyst Jason Helfstein boosted his AMZN price target on Dec. 1 from $1,165 to $1,330 (upside of 17.3%).

He says: “AWS is now well positioned to be the platform company for IOT and democratizing AI … AWS’ dominance in serverless, global databases and AI is creating unique new services in an accelerated basis, driving unpredictable services/growth.”

Indeed, AMZN has one of the best ratings from the Street right now. This ‘Strong Buy’ stock has received an impressive 32 buy ratings and just one hold rating in the last three months. Meanwhile, the average analyst price target of $1280.80 translates into upside potential that’s close to 13%.

Top AI Stocks to Buy: Alphabet (GOOGL)

Top AI Stocks to Buy: Alphabet (GOOGL)investorplace.com/wp-content/uploads/2017/12/googlai-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/googlai-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/googlai-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/googlai-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/googlai-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/googlai-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/googlai-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/googlai-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/googlai-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/googlai-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/googlai-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/googlai-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Google CEO Sundar Pichai has made a big deal of Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL ) “AI first” future. The company is pouring money into AI research and acquisitions, and the investment is paying off.

On Nov. 10, KeyBanc revealed its “Top 20 AI All-Stars” within the tech sector. One of the key mega-cap stocks on this list is Alphabet. GOOGL “implemented 1,600 algorithms to enhance search last year, with AI and machine learning being core to all new services going forward” says top KeyBanc analyst Andy Hargreaves.

One example? 100% of Google’s Chinese-English Translations are ML-powered. Google says this reduces errors by 55% to 85%. Another example? Google has just released a tool called DeepVariant that uses the latest AI techniques to map a person’s genome from sequencing data.

Hargreaves has a buy rating and $1,150 price target on the stock. Overall, we can see that Alphabet has received 22 buy ratings and 3 hold ratings in the last three months. These analysts are predicting (on average) that the stock can soar 15% from the current share price of $1,011 to $1,164.

Top AI Stocks to Buy: Micron (MU)

Top AI Stocks to Buy: Micron (MU)investorplace.com/wp-content/uploads/2017/12/muai-300×79.png 300w, investorplace.com/wp-content/uploads/2017/12/muai-768×201.png 768w, investorplace.com/wp-content/uploads/2017/12/muai-1024×268.png 1024w, investorplace.com/wp-content/uploads/2017/12/muai-65×17.png 65w, investorplace.com/wp-content/uploads/2017/12/muai-200×52.png 200w, investorplace.com/wp-content/uploads/2017/12/muai-400×105.png 400w, investorplace.com/wp-content/uploads/2017/12/muai-116×30.png 116w, investorplace.com/wp-content/uploads/2017/12/muai-100×26.png 100w, investorplace.com/wp-content/uploads/2017/12/muai-150×39.png 150w,https://investorplace.com/wp-content/uploads/2017/12/muai-78×20.png 78w, investorplace.com/wp-content/uploads/2017/12/muai-800×210.png 800w, investorplace.com/wp-content/uploads/2017/12/muai-170×45.png 170w” sizes=”(max-width: 1209px) 100vw, 1209px” />

Micron Technology, Inc. (NASDAQ:MU) is one of the world’s three biggest memory companies (Samsung and SK Hynix being the other two). Together these three companies control over 80% of the $122 billion global memory chip market at a time of worldwide memory shortage.

“We believe this global memory chip shortage is set to continue until the end of 2018, at the least” writes Cyrus Mewawalla, the managing director of CM Research. He says demand for DRAM chips and NAND flash chips comes from “new and powerful technology cycles” such as artificial intelligence and augmented reality.

For example, MU chips are used to power self-driving vehicles and help the car’s systems detect hazards on the road. Specifically, Micron says it is already shipping its fastest LPDDR4x memory to “multiple automotive customers,” enabling system bandwidth speeds of 100 GB per second.

MU has received 22 buy ratings versus just 3 hold ratings in the last three months. At the same time, the average analyst price target of $53.24 indicates upside potential of over 33%.

Which stocks have a strong buy rating in the sector that interests you?

TipRanks tracks and ranks over 4,700 analysts from eight different mark

Salesforce Stacks Its Deck Beyond CRM

Salesforce.com (NYSE:CRM) has stacked its deck for growth over the long haul. The company has the financial fundamentals, a growing customer base, and an expanding footprint with existing customers, a passionate invested user community, and the next generation management team needed to propel high growth into the future. Its closest competitors lag far behind. Any dips in its share price present a good time to buy.

Financial Fundamentals

Salesforce exceeded analyst expectations yet again. It ended Q3 with almost $15.9 billion in booked business, on and off the balance sheet. Combined third quarter revenue was $2.68 billion, an increase of 25% year over year. Subscription and support revenues were $2.49 billion, an improvement of 25% year over year. Professional services and other revenues were $194 million, an increase of 20% year over year. Net income was $51.4 million, $0.07 per share. Adjusted EPS at $0.39 beat analyst estimates of $0.37. GAAP diluted earnings per share was $0.07.

Deferred revenue is also growing. As of October 31, 2017, the balance sheet showed $4.39 billion, an increase of 26% year over year and 24% in constant currency.

Revenue that is unbilled and deferred but contracted (not on the balance sheet) ended the third quarter at approximately $11.5 billion, up 34% year over year.

Salesforce is forecasting revenues of 2.8-2.81 billion and an EPS of $0.32-0.33 for the fourth quarter which may disappoint some traders who had forecasted revenues of $2.79 billion and EPS of $0.34. This may be partly why Salesforce share prices have fallen/flattened since Q3 results were announced one week ago. It is also likely that investors are cashing in on big gains.

Newer Cloud and Platform Revenues Growing Quickly

Salesforce which began as a CRM (customer relationship management) cloud solution has grown its business beyond its initial Sales Cloud. It now sells subscriptions and services on several additional clouds, including its Service Cloud, Sales Cloud, and its Platform(aka App Cloud.)

Salesforce subscription revenue breakdown

(Source: Salesforce Q3 press release)

In the Q3 earnings conference call, Salesforce revealed solid revenue growth beyond its flagship Sales Cloud (which grew at 16.8 percent) to its Service Cloud (25.1 percent y/y growth), Platform (33.6 percent y/y growth), and Marketing and Commerce Cloud (40 percent y/y growth.)

More than 70% of Salesforce’s business is with customers who use more than one Salesforce Cloud.

Product Pipeline + Partnerships

Salesforce has leading edge products such as Einstein Analytics (artificial intelligence), Quip (a Salesforce subsidiary with next generation productivity apps), and a slew of add-on products such as its Industry Clouds for Health, Financial Services, and Communities as well as SteelBrick (configure, price, and quote software), Pardot (e-mail marketing), and LiveMessage among others. These are newish and represent $.31 of every dollar Salesforce earns.

Salesforce also announced a partnership with Google (NASDAQ:GOOG) (NASDAQ:GOOGL) in November which has not even begun to bear fruit. Through it, the companies will work together to bring Google Analytics, the same ones it uses for its successful ad business, to Salesforce customers. When integrated into Salesforce’s products, Salesforce customers will have complete views of customer journeys on and offline, something that competitors like Oracle (NYSE:ORCL), SAP (NYSE:SAP), and Microsoft (NASDAQ:MSFT) aren’t able to provide.

On a call with investors last week, Salesforce CEO Marc Benioff said that “We’re on a path to exceed $20 billion faster than any enterprise software company in history.”

Salesforce’s Massive Community of Evangelists

Dreamforce, the company’s user conference, drew more than 150,000 Salesforce enthusiasts (called Trailblazers) to San Francisco earlier this month. They engaged not only with Salesforce executives to learn firsthand about the company’s portfolio of products, but they also attended workshops, showed off their certification badges to each other (they don’t mean much at your kids’ soccer game, but they do within user communities), and were inspired by celebrities like Ashton Kutcher, Natalie Portman, will.i.am, the Bush twins, and former first lady Michelle Obama. Who wouldn’t want to be part of that club? Belonging is important to millennials, and they will soon be making software buying decisions.

This is a generation of buyers who value the recommendations of their peers, they don’t download white papers like older executives did.

Salesforce Expertise Tied to Career Success

salesforce badge collector

Salesforce introduced new learning pathways and programs on Trailhead for its Trailblazers (Salesforce users.) More than 450,000 have signed up to learn how to develop applications on and use the Salesforce platform. This is a group of users that collects badges, certifications, and builds careers as they learn. Not only can they make Salesforce look good in their workplaces, but their livelihoods are invested in the success of Salesforce where they work.

Next Generation of Leaders

Salesforce has identified its next generation of leaders. CEO Benioff promoted entrepreneur and former Google and Facebook executive Brett Taylor to President Product Development. Taylor has brought some highly successful and popular web-based technology products to market, including Google Maps, FriendFeed (sold to Facebook (NASDAQ:FB)) and Quip (sold to Salesforce). He also founded the Google I/O, the Google developer program. Benioff also announced that Alex Dayon who came to Salesforce in 2008 to launch Salesforce’s new clouds (Marketing, Service, Commerce and Platform) is now the company’s President and Chief Strategy Officer.

Taylor and Dayon know what the next generation of business leaders want, they have built some of the most widely used software offerings for millennials and are well-positioned to lead Salesforce into the future with products that inspire and empower the digital generation.

Salesforce’s stock is currently trading at $103.70. Full year guidance is $12.45-12.5B. The company told investors that it expects to be at $20-22B for FY22. For anyone who intends to hold it over the long term, it’s a buy.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About this article:ExpandAuthor payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.Tagged: Investing Ideas, Long Ideas, Technology, Application SoftwareWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here

SailPoint Technologies – Nice Sailing For This IPO

SailPoint Technologies (NYSE:SAIL) is an interesting software/security business which has just gone public. The company is growing at solid rates, operates in an industry which enjoys tailwinds and is actually posting GAAP profits at the moment, an interesting combination for an IPO candidate.

I like the combination and somewhat modest valuation, although that relative discount has disappeared following strong pricing action and subsequent gains, as shares now trade around the $14 mark. I consider this fairly valued after a solid run-up, as I will continue to monitor operational progress with great interest.

Enterprise Identity Solutions

SailPoint provides enterprise identity solutions and has been established by industry veterans to secure and govern the digital identity of workers and other business partners. Examples of this is constant management of access rights to certain applications and data.

Many organisations cannot answer which individuals have access to data, whether they should have access to data and how data is being used. SailPoint’s solutions are offered both on-premise as well as in the cloud. Not only are the solutions needed to secure data and avoid potential devastating breaches, many regulations in terms of general laws and compliance require much more intense monitoring of data as well.

The solutions of the company are in great demand and are embraced by reputable integrators such as Accenture as well as the large accounting and consultancy firms.

The Offering

SailPoint sold 20 million shares for $12 apiece, a dollar above the high end of the preliminary offering range of $9-$11 per share. It should be said that 14.3 million of these shares benefit the company as the remainder of the shares are offered by selling shareholders. This implies that the company will reap gross proceeds of $172 million in connection to the deal.

As the company operated with a bit of debt ahead of the offering, the proceeds will be used to reinforce the balance sheet. Following the IPO and the revision of the offer price, SailPoint will operate with a net cash position of $30 million. With 89.6 million shares outstanding, the company is valued at $1.07 billion at the offer price, for an enterprise valuation of $1.04 billion. This valuation has risen to $1.22 billion as shares have rallied to $14 per share.

The company has demonstrated impressive growth in recent times. Sales rose by nearly 39% to $132.4 million last year, generated from 695 different customers. The company turned an operating loss of $8.2 million in 2015 to a modest profit of $2.7 million last year.

Growth continued in the first nine months of this year as sales were up 34% to $118.3 million. The company narrowed operating losses from $5.7 million to $0.6 million at the same time, as the fourth quarter is seasonally the strongest in this business. The company seems well positioned as third-quarter sales growth actually accelerated to 40%. If this growth can be maintained at 40%, sales will surpass the $190 million mark this year. Based on operating profits of $8.4 million in Q4 of last year, and accounting for some operating leverage, operating profits could come in at $10 million this year.

Valued at little over $1.2 billion, SailPoint is valued at little less than 6.5 times sales and trades at a very high earnings multiple.

Potentially Lucrative IPO

Investors like security firms in this market given the many high-profile data breaches seen in recent years. Trading at less than 6.5 times sales while those sales grow at an impressive pace, long-term prospects for security related firms remain good and multiples look reasonable.

On the other hand, the company is only marginally profitable and faces fierce competition from many larger firms such as CA Technologies, IBM (NYSE:IBM), Oracle (NYSE:ORCL) as well as a pure play firm such as Varonis (VRNS). This firm is valued at roughly $1.3 billion on an enterprise basis following a decent move higher this year. Its revenues come in at roughly $200 million as well, similar to SailPoint, and is trading at a similar 6.5 times sales multiple. Unlike SailPoint, Varonis is posting modest operating losses while its business is growing at a slightly slower pace at around 30% per annum.

Other risks include changes in the marketplace, potential for software malfunction which makes that abuse goes undetected, competitive offerings, slower growth and lack of margin progress which is needed to create compelling earnings multiples at some point down the road.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

SeekingAlphaAbout this article:ExpandAuthor payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.Tagged: Investing Ideas, IPO Analysis, Technology, Security Software & ServicesWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here

2017 Q4 IT Spending Could Be Huge: 3 Stocks to Buy Now

Regardless of how you feel about the current political climate in the United States, one thing seems very clear: business optimism is as high as it has been in years. And with a very surprising third-quarter gross domestic product reading of 3%, despite some of the worst storms in a generation, the trend seems to be going higher. One of the positives from optimism in the corporate world is renewed and, most importantly, increased levels of spending, and that seems to be the case when it comes to information technology (IT) spending in the fourth quarter.

In a new research report, Oppenheimer has tallied the results from its fifth annual fourth quarter IT spending survey, and they look very positive. The analysts note that the report provides an updated assessment of demand conditions and can be a sentiment indicator of directional changes in IT spending through year’s end. The report said this:

Positively, the trend lines show an inflection, and reveal strengthening IT spending patterns versus prior years. The survey data points to a healthy operating environment for new software sales and should translate into good fourth quarter technology earnings results. Bottom Line: The trend lines and qualitative feedback suggest a more optimistic mindset from IT buyers this fourth versus prior years, which is a positive data point for upcoming quarterly results for large-cap software vendors, and best-of-breed SaaS vendors with technology visions that are aligned with customer demand, are differentiated, and have difficult-to-replicate products and services.

Three companies could be big winners, and their shares look like good buys now.

Salesforce.com

This top company reported solid fiscal 2018 second-quarter results as billings drastically improved.Salesforce.com Inc. (NYSE: CRM)provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.

It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices; and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

The company’s guidance for revenues of $20 billion to $22 billion (17% to 21% compounded annual growth rate) in fiscal 2022 is consistent with top analysts long-term framework and has upside. Many see battle lines emerging given the Salesforce-Google partnership versus Adobe and Microsoft, as digitization becomes a pronounced theme.

The Wall Street consensus price objective for the stock is $114.22. The shares closed trading on Wednesday at $105.43 apiece.

Oracle

This top software stock was hit hard in late September and offers a very good entry point.Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide.

The companylicenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. ItsOracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

Oracle reported a stronger-than-expected August quarter, as fiscal second-quarter earnings and revenue guidance was in-line with Wall Street. The companys Cloud revenues guidance at 43% year over year was lower than some estimates, causing some to overestimate SaaS organic growth. Oracle looks poised to deliver mid-single-digit software revenue growth and double-digit earnings per share growth.

Shareholders are paid a 1.57% dividend. The posted consensus price target is $56.40, and the stock closed Wednesday at $48.82 a share.

24/7 Wall St.
Why This May Be the Perfect Time to Chase Warren Buffett’s Largest Stock Picks Workday

This top company also looks to benefit from increased IT spending, and it has had a very solid year for investors. Workday Inc. (NYSE: WDAY) is a leading provider of enterprise cloud applications for finance and human resources. Workday delivers financial management, human capital management and analytics applications designed for the world’s largest companies, educational institutions and government agencies.

Earlier in the fall, Workday hosted a very upbeat and positive analysts day, and many feel that the company is transforming into a platform story, customer growth is reaching an inflection point, and the module attach rate is very strong. Long-term operating margins are being increased as many analysts feel that big picture of the companys operating leverage is not fully reflected in the stock price.

Note that the consensus price target for the shares is the same as the $106.61 most recent closing price.