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The Zacks Analyst Blog Highlights: Novartis, Microsoft, Oracle, Amazon and Yahoo

Zacks Equity Research

For Immediate Release

Chicago, IL – June 26, 2013 – 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 Novartis (NVS-Free Report), Microsoft Corp. (MSFT-Free Report), Oracle Corp. (ORCL-Free Report), Amazon's (AMZN-Free Report) and Yahoo Inc. (YHOO-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

Breakthrough Status for Novartis Drug

Novartis (NVS-Free Report) recently announced that the US Food and Drug Administration (:FDA) has granted “Breakthrough Therapy” designation to its pipeline candidate RLX030 (serelaxin)  which is being developed to treat patients with acute heart failure (:AHF).

The designation, which was enacted as part of the 2012 Food and Drug Administration Safety and Innovation Act, is granted to potential new treatments for serious or life-threatening diseases or conditions where the initial clinical data shows that the treatment has the potential to demonstrate substantial improvement on one or more clinically significant endpoints compared to existing treatments. The designation should help fasten the development and review process for the candidate.

Data from the phase III trial, RELAX-AHF, showed that RLX030 improved symptoms and reduced mortality in patients with acute heart failure (:AHF). It was observed that RLX030 reduced dyspnea (shortness of breath) as well as a 37% reduction in mortality at 6 months after an AHF episode as compared to patients undergoing conventional treatment.

We note that RLX030 is currently under regulatory review in several countries including the US and the EU.

We remind investors that Novartis acquired RLX030 through the acquisition of privately-held Corthera Inc. in 2010.

As per Novartis, as many as 3.5 million AHF incidents happen in the US and EU per year with the incidence expected to go up further as the population ages.

Microsoft, Oracle in Partnership

The world’s largest software maker Microsoft Corp. (MSFT-Free Report) and Oracle Corp. (ORCL-Free Report) entered into a strategic partnership enabling customers to run Oracle software on Windows Server Hyper-V and Windows Azure. Financial aspects of the deal were not disclosed by either party.

Through this partnership, Oracle will support its software which includes Java, Oracle Database and Oracle WebLogic Server on Microsoft’s Windows Server Hyper-V and Windows Azure. On the other hand, Microsoft will offer Oracle’s software to its Windows Azure customers. Further, Oracle will make its Linux software available to Microsoft’s cloud computing customers.

The hybrid cloud offering will provide more choice and flexibility to customers. Now both the tech giants will be able to provide solutions for Oracle applications, middleware and databases. The partnership will allow both the tech giants to compete effectively with local cloud-based software providers.

Windows Azure is Microsoft’s cloud computing platform for building, deploying and managing applications and services through a global network of managed datacenters. Windows Azure core offerings include Media Services, Mobile Services, Cloud Services, Virtual Machines, Websites and Big Data. It competes with Amazon's (AMZN-Free Report) cloud computing platform Amazon Web Services (:AWS) and OpSource Cloud Computing Services.

According to Gartner, the public cloud market may jump 18.5% to $131.0 billion in 2017 from $111 billion in 2012. Microsoft, with its solid portfolio and this partnership with Oracle should be able to tap this opportunity.

The company is expanding Windows Azure internationally, which represents a significant investment in the company's cloud strategy. The cloud market looks attractive and given the slump in the PC market and its struggle on the desktop and mobile fronts, it is important for the company to increase focus on emerging segments such as mobile hardware and the cloud.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. We believe that Microsoft’s current investments are supported by its strong balance sheet and expect these to drive the next growth phase, improving prospects of market share gains.

Microsoft reported revenues, excluding deferrals, of $21.46 billion in the second quarter of fiscal 2013, up 34.0% sequentially and 2.7% from last year, in line with our estimates. All except the Entertainment & Devices segment grew both sequentially and from the year-ago quarter.

Currently, Microsoft has a Zacks Rank #3 (Hold). Another technology stock that has been performing well is Yahoo Inc. (YHOO-Free Report) carrying a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.


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