|Bid||0.00 x 800|
|Ask||0.00 x 1000|
|Day's Range||133.81 - 135.68|
|52 Week Range||105.94 - 154.36|
|Beta (3Y Monthly)||1.54|
|PE Ratio (TTM)||13.87|
|Earnings Date||Oct 16, 2019|
|Forward Dividend & Yield||6.48 (4.84%)|
|1y Target Est||152.80|
A lot of people talk about blockchain and how it can revolutionize financial transactions and investing, but few people talk about its impact on social justice issues. Bond.One Chief Strategy Officer John Mizzi, joins Yahoo Finance’s Adam Shapiro, Dan Roberts, and Heidi Chung to discuss.
- New quantum risk assessment and subscription services available to clients - IBM Cloud will begin to provide quantum-safe cryptography services on the public cloud in 2020 - IBM Research demonstrates ...
The right mergers and acquisitions (M&A;) can make a good company even better by opening up new markets, expanding capabilities and market share, and diversifying product lines.Not every deal is a guaranteed winner, but investors typically benefit from smart M&A.; A 2016 Booth Business School study found, on average, an increase in overall value for both the acquiring and acquired companies at the time of the merger, and a long-term rise in value for companies that made cash acquisitions.Consider the $81 billion merger between Exxon and Mobil in 1999 that created Exxon Mobil (XOM) - now a $300 billion goliath and the largest publicly traded energy company on U.S. exchanges. Or there's Walt Disney's (DIS) $6 billion buyout of Pixar in 2006. The studio's animated films have generated nearly $11 billion in worldwide box office alone, not accounting for merchandise and other related opportunities.Last year was an especially good year for corporate M&A; thanks to major catalysts provided by tax reform, low borrowing costs and a healthy stock market. Dealmaking hit near-record levels last year. According to Mergermarket, 5,718 transactions closed, and deal volume exceeded $1.5 trillion - the second-highest total ever. Also noteworthy was last year's surge in "mega-deals" - transactions valued at more than $10 billion. These included Keurig Dr. Pepper's (KDP) $27 billion acquisition of soft drink maker Dr. Pepper Snapple Group and pharmacy chain CVS Health's (CVS) $70 billion takeover of health insurance provider Aetna.Here are 15 large-cap stocks that are looking for big things out of their pending or recently closed M&A; deals. These mergers and acquisitions are either already sparking new life in the acquiring companies, or analysts and other market professionals expect them to do so over the coming years. SEE ALSO: The Berkshire Hathaway Portfolio: All 47 Buffett Stocks Explained
After some brief excitement following the closing of its Red Hat deal, International Business Machines (NYSE:IBM) stock is back in the doldrums.Source: JHVEPhoto / Shutterstock.com Shares were due to open Aug. 22 at about $134.20. They're down 7.5% over the last year, and almost 30% over the last five years. Shareholders are still getting a $1.62 per share dividend that yields 4.84%, but Red Hat blew a huge hole in the balance sheet and IBM stock price. IBM debt on June 30 was over $58 billion. * 10 Marijuana Stocks That Could See 100% Gains, If Not More IBM needs a new story to tell. Red Hat, and the "open hybrid cloud," is that story. IBM has created Open Shift "Cloud Packs" for all its hardware, with hopes of making all computers into clouds. This includes IBM Z-Series mainframes.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Whitehurst for IBM CEO?What analysts say they want from IBM stock is Red Hat CEO Jim Whitehurst in current CEO Virginia Rometty's chair. They want Red Hat running IBM.That wasn't the promise when this deal was put together. The promise was that Red Hat would get autonomy from IBM, not that IBM would lose its autonomy to Red Hat. But Whitehurst's concept of an Open Organization has excited analysts who don't even know what it is.If IBM became an Open Organization, these analysts think, it would replace the top-down structure IBM has used for a century with an organic system in which employees and customers are part of the product design process. Instead of selling gear or even solutions, IBM would become a corporate change agent.But IBM has spent decades getting to this low point, dumping older workers and paying those who remain less than competitors.Rometty's IBM is a hollowed-out shell, analysts think, dedicated solely to its dividend and hierarchies. Can Whitehurst really teach it to dance? Everybody Gets a CloudThe 2010s have become the "cloud decade" with $4.5 trillion of market cap locked inside just five companies with scaled networks of cloud data centers.Whitehurst's vision is that every company and organization gets its own cloud, using the clouds of Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) seamlessly, and only when needed.This is now IBM's vision. So, the analysts ask, why isn't Whitehurst running IBM?It's because IBM also has a host of other software and hardware platforms, including older, proprietary Unix operating systems, and the Z-Series software of its mainframes. They are on what senior Vice President for Cloud Arvind Krishna calls a "multi-year journey" toward compatibility.In short, it will take years for IBM stock to become what Whitehurst wants it to sell.IBM also has other irons in the fire besides cloud. The company has been spending big on artificial intelligence, on machine learning, and on blockchain. The Bottom Line on IBM StockInternational Business Machines has been run like an old-fashioned industrial organization for decades. Even if Whitehurst became CEO tomorrow, it would take him years to transform the company.IBM shareholders are income investors focused on the dividend, which costs IBM nearly $1.5 billion to service each quarter. Then there's the interest on that debt which, even at 5% would cost nearly $3 billion a year to service. So far, IBM's only financial response to Red Hat has been to halt its stock buybacks, on which it spent $1.2 billion in the last year.IBM earned $8.7 billion in 2018 and could hit that mark again, assuming its third quarter earnings come in as expected. Whether it can be transformed and perform like a real tech company is purely speculative at this point.But if it can, the gains would be huge. Oracle (NASDAQ:ORCL), considered stodgy by Silicon Valley standards, is worth $177 billion with sales of $40 billion. IBM is worth $113 billion on sales of $79 billion. IBM is a long-shot speculation with a 5% yield.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN and MSFT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post IBM Stock and Jim Whitehurstas Toughest Test appeared first on InvestorPlace.
In a recent post for InvestorPlace.com, I described the main reasons why Amazon (NASDAQ:AMZN) stock should be a core holding for investors. The shares represent a great way to get exposure to some of the biggest trends in technology like AI (Artificial Intelligence), cloud computing, streaming and of course, ecommerce. Not many large companies can offer all that.Yet all that does not imply that AMZN is a sure bet either. AMZN is certainly facing notable risks and issues. And besides, in the tech world, a top company can easily fall to pieces. Just look at Nokia (NYSE:NOK) and BlackBerry (NYSE:BB). They were once seemingly invincible. But they are now marginal players.In other words, with AMZN stock, it's a good idea to consider its potential downsides. So let's take a look:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cloud BusinessToday the cloud business should be dominated by a company like IBM (NYSE:IBM), Oracle (NYSE:ORCL) or Microsoft (NASDAQ:MSFT). But instead, the clear leader is AMZN. Amazon CEO Jeff Bezos had the vision to leverage his company's e-commerce infrastructure into a thriving cloud unit. In fact, the cloud business was transformative for Amazon stock, as it offset the low margins of its e-commerce business and allowed it to invest in its other businesses. * 10 Marijuana Stocks That Could See 100% Gains, If Not More But there is a problem: the cloud unit's growth is slowing. For the most part, the competition is becoming much more of a factor for AMZN in this sector.I'm not saying that AMZN 's cloud business will somehow fall apart. I believe the unit will remain solid.Yet don't expect it to continue to provide the necessary fuel to boost Amazon stock. Leadership and Managerial BandwidthIn a matter of only 25 years, Jeff Bezos has built a company worth close to $1 trillion. He was not only able to dominate high-growth markets but also find ways to deal with challenging environments, such as the dot-com bust (which almost led to the bankruptcy of AMZN). He was also masterful in convincing Wall Street that profits were not very important!But during the past couple of years, there have been some nagging questions about Bezos' leadership. First of all, he has been targeting a large number of market opportunities and many have not been successful (like the foray into smartphones). If anything, AMZN has become somewhat of a grab-bag of different businesses that really do not have much synergy.Then there is Bezos' personal situation. No doubt, his divorce was unexpected. What's more, according to a recent Wall Street Journal profile, Bezos has been focusing much more of his time on AMZN's Hollywood image (the title of the piece was "Jeff Bezos' Journey From Private Family Man to Tabloid Sensation"). He is also devoting more time to pursuits outside the company, like his space venture. The Limits of AMZN's GrowthEven with over $240 billion in revenues, AMZN continues to crank up the growth. Note that last quarter, its revenue jumped 20% year-over-year.But keeping that level of growth up will get harder and harder. It will also mean moving into categories in which AMZN may have fewer advantages.An example is healthcare. The company has been investing heavily in this business, with internal development and acquisitions. But so far, the results have been mixed. For example, AMZN's PillPack division - which is a digital provider of prescriptions - recently was accused by health information network Surescripts of fraud. True, AMZN has denied any wrongdoing. But this episode shows that it can be extremely difficult to disrupt highly regulated markets that have entrenched players.Interestingly enough, as AMZN gets larger, the company becomes a bigger target of antitrust regulators. Already it appears that AMZN is a target of a Department of Justice probe, which could ultimately lead to heavy fines or even the breakup of the company.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post The Scariest Risks Facing Amazon Stock appeared first on InvestorPlace.
Lisa Su, CEO of Advanced Micro Devices (NASDAQ:AMD) has vehemently denied the rumor that she is leaving the company she's run since October 2014 to become the chief executive of IBM (NYSE:IBM). If she did, however, it would be terrible news for owners of AMD stock but great news for IBM shareholders. Source: Casimiro PT / Shutterstock.com Here's why. The Rumor's GenesisBefore I get into the reasons why AMD stock would suffer greatly without Su, let's consider how and why the rumor got started in the first place. InvestorPlace - Stock Market News, Stock Advice & Trading TipsAn article appeared on wccftech August 6 that suggested the CEO was considering leaving Advanced Micro Devices to become IBM CEO Ginni Rometty's second in command, eventually moving up to the top role. * 8 Biotech Stocks to Watch After the Q2 Earnings Season The author, Usman Pirzada, suggested that recent AMD hire Rick Bergman, the former CEO of Synaptics (NASDAQ:SYNA), is being groomed for a quick ascension to the top job. Pirzada puts Su's departure toward the end of 2019, perhaps into 2020, giving Bergman several months to familiarize himself with AMDBergman, who's currently in charge of AMD's PC and Semi-Custom business, spent several years working at the company before moving to Synaptics in October 2011. As a result, he shouldn't have any difficulty adapting to the changes Su's made since taking the helm.According to Pirzada's sources, the negotiations for Su to join IBM have been underway for some time. The DenialSu, of course, denies she's leaving the chipmaker."Just for the record, zero truth to this rumor. I love @amd and the best is yet to come!," the CEO tweeted August 6. The scuttlebutt in the tweets following Su's denial is that Intel (NASDAQ:INTC) was somehow responsible for the bad intel (no pun intended). I wouldn't hazard a guess if that's remotely true. Needless to say, the thought of Su taking the reins at IBM should have Big Blue's shareholders praying the rumor's not a dud. I've been fairly negative about IBM in recent times so a move to hire someone of Su's caliber to replace Ginni Rometty as CEO would absolutely be the tonic it needs to reignite its growth on both the top and bottom line. However, as exciting as the speculation is for IBM shareholders, Business Insider's assertion that Red Hat CEO Jim Whitehurst is Rometty's likely successor makes total sense. Whitehurst is only 52 years old, nine years younger than Rometty, and in the prime of his CEO career. Furthermore, IBM just spent $34 billion to buy Red Hat, easily its most expensive acquisition in the company's long and storied history. It's not going to let its future get away from it, no matter how attractive another candidate might be. The Loss of Su Would Be ExtremeSeeking Alpha contributor Kwan-Chen Ma recently estimated that Lisa Su's value to AMD stock is worth at least 20%-30% of its market cap. Today, as I write this, the AMD stock price is $31.25, up 66% year to date through August 20, and 48% on an annualized basis over the past five years, approximately the same duration as Su's leadership. So, if Ma's estimate is remotely close to accurate, we're talking about Su's value to the company being in the neighborhood of $7-10 billion. To lose her to IBM of all companies would put a massive dent in the Advanced Micro Devices stock price. I could see a $6 single-day-loss on the news. Of course, Su's denial must be taken at face value. She's always been open with the investment and tech media since taking the top job. And news of a $25 million long-term retention bonus definitely tips the scales in AMD's favor. It also lends credence to the rumor, as it was filed with the SEC on August 5 -- the day before the original story and Su's tweet.But if she did leave, AMD's loss would definitely be IBM's gain. AMD Stock Moving ForwardInvestorPlace's Josh Enomoto discussed the rumor soon after it hit the internet. He believes Su would be crazy to not make the jump to IBM. "If she [Su] continues to stay on board, she likely has minimal upside potential and serious downside risks. Since we're heading toward a U.S.-China abyss, I'd say the upside is almost nonexistent," Josh wrote August 8. "But with IBM, it's all upside for Su. 'Big Blue' is on the outside looking in. They know they're in for an uphill climb and are willing to put maximum effort to accomplish their goals. Even Su's mere presence would be a lift for IBM."I couldn't agree more. AMD stock has made gargantuan gains in 2019. The odds of doing the same in 2020 are low. If Su leaves, you can expect a major correction until Bergman can right the ship. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Su's left a nice legacy for AMD. Moving on after five years is the smart thing to do. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Losing Lisa Su Would Be a Terrible for AMD (and AMD Stock) -- But a Big Win for IBM appeared first on InvestorPlace.
Once again, the trillion-dollar curse has struck for Amazon.com (NASDAQ:AMZN). In July, Amazon stock cleared $2,000, and briefly touched the twelve-zero milestone. But as it did last year, the stock quickly pulled back; it's now down about 11% from its 52-week high.Source: mirtmirt / Shutterstock.com The major catalyst has been a disappointing Q2 report. Amazon's numbers for the quarter were below analyst expectations, while Q3 guidance suggested a reasonably sharp year-over-year drop in profit.It's a sign of the trust investors have in Amazon that AMZN stock didn't fall further. Few companies of any size could have their shares trade at 70x+ next year's earnings, guide for falling profits, and see their stocks decline less than 2% the following day.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut that's the point. Amazon's earnings aren't falling because it's losing market share, or because customers aren't satisfied. Rather, it's continuing to invest in its business precisely to please those customers. * 10 Undervalued Stocks With Breakout Potential That's been the strategy that has built Amazon into a business worth, at the moment, almost $900 billion. And it's the same strategy that likely will get that market capitalization back to $1 trillion - and beyond. Earnings Worries for Amazon StockAmazon's sales for the second quarter were solid, with year-over-year growth just shy of 20% off a $53 billion base. It is margins and profits that might worry investors.Indeed, operating income for the quarter increased just 3.3%, with diluted EPS growth a touch lighter. And the outlook for the third quarter is even weaker: Amazon projects operating income of $2.1-$3.1 billion, a sharp decline from $3.7 billion in Q3 2018.But those profit declines are coming because Amazon has chosen to invest in the business. Most prominently, the company estimated an $800 million hit to second quarter earnings from its decision to roll out one-day shipping.Those costs will fade over time, as CFO Brian Olsavsky noted on the Q2 conference call. Amazon will improve its logistics and work through early issues, just as it did when it launched two-day shipping a few years back.Back out that spend and earnings growth looks solid for Q2, with margins actually expanding year-over-year. Those expenses in Q3 explain some, and maybe all, of the year-over-year decline.That said, the quarter wasn't perfect. Q3 guidance still looks weak even with the one-day shipping expenses (which likely were factored into Street models to at least some extent.)Amazon Web Services growth of 37% was impressive, but modestly lower than consensus. Some level of sell-off might have been expected - but I'd argue the long-term case still holds. The Bear Case for Amazon StockThe bear case for AMZN often comes down to valuation. This is a stock, after all, still valued at 75x the current consensus 2020 EPS estimate. On its face, that seems absurd.After all, margins here are thin. Competition is intensifying from Walmart (NYSE:WMT) and Target (NYSE:TGT), with the latter company posting a blowout fiscal Q2 report this week. Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), and IBM (NYSE:IBM), among others, are going after the cloud business.Between competition and sheer size, Amazon's growth almost has to decelerate. But the current valuation, on an earnings basis, hardly seems to price in much deceleration. Why Amazon Will Keep GrowingAs I've argued for some time now, simply using P/E to measure Amazon stock is short-sighted. For one, free cash flow metrics actually are pretty good. Trailing free cash flow, per the Q2 release, is $25 billion - suggesting a P/FCF multiple under 40x.More important, AMZN stock is expensive because Amazon.com chooses to make it expensive. The company didn't have to offer one-day shipping and incur an $800 million hit that took over $1 off the quarter's EPS. It doesn't have to take the big swings it does at ancillary markets - some of which, like AWS and Alexa, turn out to be huge winners.Amazon's margins and profits could soar if the company chose to focus on them. AMZN stock would look much cheaper - and maybe even cheap - in that scenario. But, wisely, management doesn't. It keeps re-investing in the business, driving growth and taking market share.This is a company that is dominant in U.S. eCommerce, with 47% market share. It's dominant in cloud. It's competitive in video, and private-label, and many other end markets. Amazon is likely on its way to becoming an online advertising giant.Is AMZN stock cheap? No. But consider that it could be. Amazon is spending billions every quarter on investments. Some will pan out. Some will not. But as the company matures, those investments will fade and provide returns. Earnings and, more importantly, cash flow, will continue to grow.A simple look at P/E doesn't account for that fact. It doesn't account for the fact that there is likely no more attractive business out there right now. Amazon is a global giant with massive reach. And as long as it keeps investing to maintain, and grow, that market share, AMZN stock is going to gain. And any sell-off will look like an opportunity.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Don't Sweat This Temporary Weakness in Amazon Stock appeared first on InvestorPlace.
(Bloomberg) -- Three companies — Amazon.com Inc., Microsoft Corp. and Alphabet Inc. — quietly dominate the world of cloud computing.With more more than 100 giant data centers worldwide, they rent out computing power to all manner of customers, making billions of dollars along the way. In fact, cloud computing has done more to fuel Amazon’s earnings in recent years than its e-commerce business.But there’s a threat looming on the horizon, quite literally at the edge of the network. With so many mobile devices and sensors now connected to the internet — and relying on artificial intelligence — more people and companies need their computing power close to them. For everything from fast analysis of road conditions to streaming holographic concerts, remote data centers are just too far away.That’s going to hand a huge opportunity to wireless carriers, which are building fast 5G networks to handle the task. And create a threat for the dominant cloud-computing players, according to telecom analyst Chetan Sharma. “Over time, cloud will be primarily used for storage and running longer computational models, while most of the processing of data and AI inference will take place at the edge,” said Sharma, who just wrote a report on the topic sponsored by software provider AlefEdge Inc. He pegs the size of this so-called edge-computing market at more than $4 trillion by 2030.Wireless carriers and the owners of cell towers have a big advantage in the edge-computing race: Not only do they control access to high-speed telecommunications networks, they have valuable real estate, such as tens of thousands of cell sites all over the country.Cloud computing isn’t going away by any means. But there’s more pressure on the industry’s Big Three to team up with wireless carriers, so they’re not left out of the burgeoning edge market.“The big players realize that at a minimum they need to partner up with operators to get access to their real-estate property,” Sharma said.Already, AT&T Inc. — the second-largest U.S. wireless carrier — has joined forces with Microsoft Corp. and IBM Corp., two cloud providers.“Our goal is that our partners are wildly successful,” said Sam George, a cloud executive at Microsoft. “If our partners are wildly successful, we’ll be wildly successful. There’s a lot of money to be made for partners.”Amazon and Google declined to comment on their plans.AT&T has hundreds of workers focused on edge computing, and it’s “a core part of our 5G strategy,” said Mo Katibeh, chief marketing officer of AT&T’s business division.“This is one that takes a village.”IBM, meanwhile, is also working with carrier Vodafone Group Plc in Europe.“The networks are essentially themselves becoming a cloud,” said Steve Canepa, IBM’s global managing director for the telecom industry. “The telcos today have a point of presence at the edge, and that becomes a great place to have an extension of the platform.”Cloud providers in China — such as Alibaba Group Holdings Ltd. and Tencent Holdings Ltd. — invested in carrier China Unicom two years ago. And more such investments and partnerships could be coming, Sharma said.For other tech companies, including chipmakers like Intel Corp., the hope is the shift leads to a bigger opportunity for everyone.“We see a rapid convergence between the cloud providers and connectivity providers,” said Caroline Chan, a general manager at Intel. “In our view, it’s a bigger pie.”Other telecom players are angling to team up with both carriers and cloud providers. Crown Castle International Corp., which owns fiber lines as well as more than 40,000 cell towers in the U.S., is in talks with the two camps, said Paul Reddick, a vice president at the company.Crown Castle also is an investor in startup Vapor IO, which is deploying edge computing this year in six metro areas, including Chicago.“I would say this is one that takes a village,” Reddick said.Other projects are already well underway. At CenturyLink Inc., about 100 facilities that used to store telecom equipment are now outfitted with servers. And it’s making them available to corporate customers in sectors like retail and industrial robotics.“We’ve already sold these facilities to a number of customers that need to get that compute closer to the network edge,” said Paul Savill, a senior vice president at CenturyLink. “We’ve seen enough activity in this space that we can confidently build out this infrastructure.”To contact the author of this story: Olga Kharif in Portland at email@example.comTo contact the editor responsible for this story: Nick Turner at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
During the blockchain hype of 2017 and 2018, it was difficult to establish who exactly needs a blockchain and why. The market became flooded with innovations, ideas, and scams as startups and established enterprises alike looked for ways to profit from the technological revolution. As the hype died down, many critics accused blockchain as being […]
DOW UPDATE The Dow Jones Industrial Average is rallying Wednesday morning with shares of Nike and IBM delivering strong returns for the blue-chip average. Shares of Nike (NKE) and IBM (IBM) are contributing to the blue-chip gauge's intraday rally, as the Dow (DJIA) is trading 269 points higher (1.
During the past 15 years, Salesforce.com (NYSE:CRM) has been one of the best performers in the tech world. Keep in mind that the average annual return on CRM stock was an impressive 31%.Source: Shutterstock But lately things have not been so stellar. For example, the year-to-date return is 5%. This has lagged other mature tech companies like Microsoft (NASDAQ:MSFT), Adobe (NADAQ:ADBE) and even IBM (NYSE:IBM).OK then, might Salesforce stock be an opportunity for investors now? Is this the right entry point? Well, perhaps so. In fact, we'll get more details on Thursday on how things are tracking as the company will report its fiscal second-quarter results.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHere's a look at the Wall Street expectations: * For revenues, the consensus forecast is for $3.95 billion, up 20.4% from the same period a year ago. Keep in mind that CRM's own forecast is for a range of $3.94 billion to $3.95 billion. * Wall Street is looking for earnings to hit 47 cents a share. This compares to 39 cents a share a year ago.As for the prior quarter, CRM posted revenues of $3.74 billion, up 24% on a year-over-year basis. There was also a nice 34% jump in operating cash flows to $1.97 billion. * 10 Undervalued Stocks With Breakout Potential What's more, the company announced full-year guidance on revenues of $16.10 billion to $16.25 billion, for a growth rate of 21% to 22%. An Eventual QuarterThe biggest event for CRM stock during the quarter was the $15 billion acquisition of Tableau, a top player in the analytics space. The deal is actually the largest in the company's history.Founded in 2003, Tableau focused on a new approach to analytics, with an attempt to disrupt the dominant legacy companies in the industry like IBM, SAP (NYSE:SAP) and Oracle (NYSE:ORCL). At the heart of the platform was a focus on interactive data visualization that seamlessly integrated with a myriad of databases and spreadsheets.As for CRM, Tableau will become a key part of the Customer 360 analytics system. The deal will also provide a nice boost to the top-line (last year the revenues came to $1.16 billion).But of course, there were other notable highlights for the quarter. Here's a look at some: * Salesforce shelled out $1.35 billion to acquire ClickSoftware Technologies, which is a provider of field service and workplace systems. The company will become part of the Service Cloud. * A report from Forrester (NASDAQ:FORR) quantified the total economic impact and benefits of Salesforce Lightning for the Service Cloud. The result: there was a 475% return on investment over a three year period for a typical customer. * Gartner (NYSE:IT) reported that Salesforce was positioned as a leader in its 2019 Magic Quadrant for Multiexperience Development Platforms. Bottom Line for the CRM Stock PriceSalesforce.com has a knack for beating its numbers. And this upcoming report should be no different. If anything, the Tableau deal should be a help (at least for the guidance).But the dealmaking will also be critical for the long-term of CRM stock. The focus on data companies is spot-on since this allows for the leveraging of next-generation technologies, especially AI (Artificial Intelligence).In the meantime, Salesforce remains dominant in its core areas like CRM, service/support and marketing.Then again, when it comes to CRM stock, it may not be realistic to expect the kinds of standout returns of prior years. The company is much more mature nowadays and it is getting tougher to gin up organic growth.Regardless though, CRM still looks like a good choice for a core holding for investors that want exposure to enterprise categories like the cloud and AI.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post There's No Need to Pull the Trigger on CRM Stock Before Earnings appeared first on InvestorPlace.
SAN DIEGO, Aug. 21, 2019 /PRNewswire/ -- IBM (NYSE: IBM) announced today at The Linux Foundation Open Source Summit that it will be contributing implementation rights to key technologies to the open community, further building upon IBM's long legacy of open source development. IBM is opening the POWER Instruction Set Architecture (ISA), which is critical to how hardware and software work together on POWER. With the ISA and other technologies being contributed to the open community, developers will have the tools to build innovative new hardware that takes advantage of POWER's enterprise-leading capabilities to process data-intensive workloads and create new software applications for AI and hybrid cloud built to take advantage of the hardware's unique capabilities.
Blockchain is one of the most revolutionary technologies of this generation and has applications that spread across every sector of our economy. The technology has applications that go way beyond a means of transferring wealth.
Fears of a trade war with China, coupled with the specter of an upcoming recession, have hit the market hard. But shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) have so far managed to stay afloat, falling from a 52-week high of $1,289 down to a recent close of $1,164. This modest fall of just under 10% shows just how resilient Alphabet stock is.Source: Valeriya Zankovych / Shutterstock.com By comparison, both Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) are both down by nearly 15% from their 52-week highs.With last week marking the fourth anniversary of the creation of Alphabet stock, which has Google as its core operating unit, there is still plenty of gasoline left in the tank.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe restructuring of the company separated the core internet business, www.Google.com, from the peripheral mega-tech moonshots, which may take a decade or more to pay off. Whether its self-driving vehicles, artificial intelligence or healthcare, buying Alphabet stock is like placing many different bets on many different areas of the global economy that technology will re-invent. At the same time, GOOGL's core business generating internet advertising revenues remains rock-solid and growing.With all of that in mind, here are three key reasons why GOOGL stock is a strong buy. GOOGL Is Unaffected by the Threat of a China Trade WarThe bulk of Alphabet's revenues are generated in Western economies, particularly North America and Europe. Advertising sales in these markets are not affected by a slowdown in exports to China nor increased tariffs of cheap Chinese imports. * The 10 Best Cheap Stocks to Buy Right Now Goldman Sachs has recommended a service sector strategy, as opposed to goods manufacturers, for investing around the threat of a trade war."Services stocks have less exposure to trade conflict given they have lower foreign input costs that might be subject to tariffs and lower non-US sales than Goods firms," said Goldman Sachs strategist David Kostin.In his client note, Kostin recommends buying stocks such as Alphabet as well as Microsoft (NASDAQ:MSFT), JP Morgan Chase (NYSE:JPM) and Amazon as a part of a greater strategy to circumvent trade war woes. Alphabet Stock Is Backed by Strong Top Line RevenuesGoogle has consistently delivered growth in top lines revenues for the last five years. There is little reason why this trend will stop anytime soon.Further, GOOGL posted net positive earnings every year for the previous five years. At the same time, GOOGL is heavily invested in moonshots that should help bolster the GOOGL stock price in the future when the ideas behind these businesses are fully realized and start to pay off. And many of these moonshots should pay off just when the internet sector becomes a mature industry, just like steel, autos and telecom from decades past with ever-dwindling profit margins.This aspect alone makes GOOGL stock an appealing long-term stock to buy. Google Cloud Is Driving GrowthGoogle cloud revenues are not broken down separately but instead reported within the broader Alphabet segment "Google Other Revenues." While Alphabet management has made it clear that Google Cloud Services (GCS) is their fastest-growing business, they have not given specific numbers.However, the management consulting firm Gartner estimates that the total global cloud market is expected to grow to $331.2 billion in 2022 at a CAGR of 16.1%. Google has invested heavily in cloud technology with many analysts estimating that GCS alone could generate $20 billion form Alphabet stock by the end of 2020. Bottom Line on GOOGL StockAlphabet has covered the roulette table with chips. From their proven core business of internet advertising to the further-off possibility of autonomous vehicles -- propelled by a dynamic cloud business in-between -- Alphabet is undoubtedly holding out well in the current market storm.When the selloff in tech stocks finally plays out, the GOOGL stock price could be set for a strong bounce back.As of this writing, Theodore Kim did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Reasons Alphabet Stock Is Still a Bargain Amid Trade War Peril appeared first on InvestorPlace.
IBM makes the Power Series chips, and as part of that has open-sourced someof the underlying technologies to encourage wider use of these chips
If you're a regular InvestorPlace reader and own shares of IBM (NYSE:IBM), you might be familiar with some of my articles criticizing CEO Ginni Rometty. She's a big reason I wouldn't own IBM stock. Source: JHVEPhoto / Shutterstock.com There are other reasons, including Warren Buffett selling the last of his International Business Machines stock on May 2018 after a costly seven-year hold, but it is Rometty's eight-year run as CEO that I believe more than anything has destroyed IBM's chance at regaining its former glory. While I freely admit I don't know Rometty and wouldn't recognize her if I ran into her on the street, I do believe her technology chops aren't up to speed to other women working in the industry. Her background, for better or worse, is in sales and marketing, not technology. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Undervalued Stocks With Breakout Potential Sure, she recognized Red Hat was an excellent way to springboard IBM's cloud ambitions, but almost anyone in her position would be fully aware of the acquisition opportunities out there.In my last article about IBM, I facetiously suggested that General Electric (NYSE:GE) should merge with IBM so GE CEO Larry Culp could run the combined entity. "Larry Culp is a proven winner. Ginni Rometty has done nothing in her 7.5 years as IBM's CEO to demonstrate that she has the technology chops or the leadership qualities necessary to reignite the company's former penchant for innovation," I wrote July 26. "I'm not saying IBM hadn't already lost its innovation spark before Rometty became CEO in January 2012, but she's been at Big Blue for most of her career. If she were going to make IBM great again, she would have already done it."Not only is Rometty past her best before date, but she has assembled a board over the last eight years that's ancient by almost every standard. Technology companies are supposed to be young and innovative; the IBM board is anything but.If IBM is to regain its former glory, not only should Rometty step down as CEO, but they ought to recruit some younger directors. Until both of these things happen, the IBM stock price won't see $200 for a very long time. Here's why. The Average Age of the BoardIn 2019, IBM appointed two new directors to its board, both women, one of whom is African American. The move is to be applauded. However, the age of the two directors is 58 (Admiral Michelle Howard) and 60 (Martha E. Pollack). The average age of the 12 IBM board members, including the two new appointees, is 64, one year less than the traditional retirement age. While I understand it's hard to recruit younger candidates because they're still in the prime of their careers, I do believe that a company trying to get its mojo back should bend over backward to make that happen in order for IBM stock to excel. How old is the average director at Square (NYSE:SQ), considered a financial services disruptor? It's 55, almost a decade younger. In fact, four out of 11 of Square's directors are younger than 50 with just one over the age of 70. Just as Ginni Rometty, Square CEO Jack Dorsey is also Chairman. However, Dorsey co-founded Square; Rometty's merely worked at IBM for 38 years. At the very least, the Chairman's role at IBM should be separate from the CEO. In January 2018, I even suggested that Rometty moves into the Executive Chairman's position, hiring an entrepreneurial CEO to lead its turnaround. That never happened. Instead, Rometty went for the Red Hat Hail Mary. The Bottom Line on IBM StockIf you look at IBM's roster of directors, none of them have high tech experience. Sure, all of them have used technology in their specific careers, but no one stands out as a real go-getter in the tech industry. At least Square has several directors that have serious tech venture capital experience that allows them to understand the technical aspects of the company's business better. You would think that a company with a market cap of $120 billion would be able to find one or two directors with real-world tech experience. Given the current composition of IBM's board, I don't see how it's going to work through the Red Hat integration successfully. Until the board gets younger and more technically bent, I remain skeptical of IBM stock's chances. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post IBM Just Canat Compete With Current BoardÂ appeared first on InvestorPlace.
IBM Supply Chain Application Noted for its Retail Market Dominance, Significant Reduction in Implementation Time, and Continued Investment Integrating Disruptive Technologies ARMONK, N.Y. , Aug. 20, 2019 ...
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. When Japan decided to step up its fight with South Korea last month, it dug deep into the supply chain to impose sanctions on three obscure materials made by a handful of Japanese companies few have ever heard of.The most powerful weapon in Tokyo’s campaign against its neighbor turned out to be a half-dozen or so niche firms with names like JSR Corp., Shin-Etsu Chemical Co. and Tokyo Ohka Kogyo Co. They make fluorinated polyimide, hydrogen fluoride and photo-resist: essential ingredients for the manufacture of the displays and semiconductors that go into every piece of modern consumer electronics, from Apple Inc. iPhones and Dell Technologies Inc. laptops to the full range of Samsung Electronics Co. devices. Japan prohibited the export of those materials, allowing an exception only if suppliers secure a license and renew that license regularly.How did they become so indispensable? And how did they manage to stay on top even after their Japanese clients ceded the chip and display markets to Taiwanese and South Korean rivals? The answer lies in a series of well-timed investments decades ago, combined with a willingness to explore foreign markets and an unceasing refinement of manufacturing standards too exacting for anyone else to try and match.“JSR is an interesting case in that they became big in photo-resists because they succeeded overseas first,” said Damian Thong, an analyst at Macquarie Group Ltd. “And much of this success was because of the strategy of one man — Mitsunobu Koshiba.”The JSR chairman’s story shows just how hard it would be for a newcomer to fill the shoes of one of these suppliers. Koshiba spearheaded the company’s pivot into photo-resists, a light-sensitive liquid used to imprint circuits as narrow as a few strands of DNA onto silicon wafers in a process called lithography. Gadgets keep getting slimmer, more powerful and cheaper because chip companies are able to etch ever smaller circuit patterns onto silicon. When it comes to the most advanced chip processes, JSR is one of the few that can deliver the goods.When 25-year-old Koshiba joined JSR in 1981, the company’s biggest business was still tire rubber. (The name is an abbreviation of Japan Synthetic Rubber.) As luck would have it, photo-resist at that time used resins that JSR had access to for its existing business, and the company saw an opportunity to break into a new growth industry. Japanese semiconductor makers were just beginning their rise to global dominance, and suppliers were positioning themselves to go along for the ride.The problem for JSR was it didn’t belong to any of the local keiretsu, a grouping of suppliers that receives preferential access to contracts. And the company was also up against Tokyo Ohka or TOK, the first in Japan to manufacture photo-resist. By the mid-1980s, TOK controlled as much as 90% of the domestic market.“As a neutral company without keiretsu affiliations, we had to look outside Japan,” Koshiba said in an interview, outlining JSR’s decades-long rise but declining to talk in detail about sensitive trade negotiations now underway between Tokyo and Seoul.JSR’s decision to get into that market was bold but Koshiba seemed like the right person for the job. He’d spent two years studying materials science at the University of Wisconsin-Madison on a Rotary Club scholarship, was one of the few English speakers at the company and was eager to work abroad. In 1990, JSR sent him to Belgium to set up a photo-resist joint venture with the country’s biopharmaceutical giant UCB SA. The goal was to target the American market.As timing would have it, JSR was going overseas just as Japan was approaching the peak of its semiconductor prowess. That same year, NEC Corp., Toshiba Corp. and Hitachi Ltd. were the world’s biggest chipmakers, pushing aside Intel Corp. and Texas Instruments Inc. Japanese firms occupied six spots in the industry’s top 10 ranking by revenue, a level of concentration that hasn’t been matched by any country since, according to IC Insights.Japan’s seemingly unshakable control of the computer memory market gave the country renewed national confidence. The mood was reflected in the book “The Japan That Can Say No,” in which right-wing politician Shintaro Ishihara and Sony Corp. co-founder Akio Morita argued for a more muscular foreign policy. In an eerie echo of recent events, the authors contended that the Japanese government had the power to determine the outcome of the Cold War just by directing its national companies to sell the chips used in intercontinental ballistic missiles (ICBMs) to the Soviets instead of the U.S.But the Cold War ended before that theory could be tested. Over the following decade, personal computers overtook ICBMs as the primary destination for chips and demand shifted to prioritize low unit costs over military-spec quality. By 2006, Samsung had risen to No. 2 on the list of the world’s biggest chipmakers, with Korean compatriot SK Hynix Inc. ranking seventh and only three Japanese names remaining among the top 10.For JSR, the turning point came in 2000. Koshiba, who was based in California at that time, recalls being dragged into an emergency meeting on a Sunday wearing a T-shirt and shorts. Word was a rival company was about to clinch an agreement with IBM for joint research on a next-generation photo-resist material. “Get it back,” he was told. Koshiba leaned on the network of American industry contacts he had spent a decade building, people who had known him through the worst of U.S.-Japanese trade tensions. Within a month, IBM signed with JSR.“Without that deal, we wouldn’t have gotten to No. 1,” Koshiba said.In lithography, the formula for shrinking transistors has only two levers: increase the light power or use a lens that lets more light through. Every time the chip process shifts to a higher-energy band of light, resist makers have to go back to the drawing board, opening up new opportunity. The research partnership with IBM ushered in the fourth such shift since integrated circuits replaced vacuum tubes in the 1970s, and JSR rode it all the way to the top.The company now commands about 40% of the market for the latest generation of resist used in mass production. It also supplies more than 30% of the photo-resist for 3D NAND, the most advanced flash memory chips, which are among the few product lines where Japan still competes with Korean rivals. In 2019, JSR is expected to generate about three times the revenue and five times the profit it did in the early ‘90s.What makes this business inaccessible to newcomers is the extreme degree of purity and quality demanded by customers. TOK says a single drop of coffee in two Olympic-sized swimming pools would be considered an unacceptable defect. JSR’s analogy is to a handful of tainted golf balls being enough to spoil a batch the size of the entire Japanese archipelago.In addition to being technically challenging, the markets these companies operate in are small and don’t promise fantastic growth. According to research firm Fuji Keizai Group, the industry’s sales rose just shy of 8% last year to $1.3 billion. Koshiba jokes that even the market for ramen noodles is bigger than that.“To recreate JSR, you basically need to spend as much as they did in the past 20 years on R&D and relationships, and also rebuild their reputation,” Macquarie’s Thong said. “These materials are used in such moderate quantities that to rebuild the whole infrastructure is probably not worth the investment.”And that’s the irony of the current situation. By stoking trade tensions, Japan may encourage its neighbor to subsidize competition to JSR and TOK that wouldn’t make sense under normal market conditions. It’s a matter of survival: Korean corporations now depend on Japan for over 90% of all the fluorinated polyimide and resists they need, and 44% of hydrogen fluoride requirements, Societe Generale estimates.Read more: Japan Grants South Korea Export License, Lessening Trade FearsFor the time being, JSR and TOK retain dominance over one prized material that keeps the consumer electronics industry ticking. According to South Korean Prime Minister Lee Nak-yon, Japan has approved exports of photo-resist for the next-generation of lithography currently under development by Samsung and Taiwan Semiconductor Manufacturing Co. But one of Japan’s last strongholds of tech industry domination may be under threat.“They have the engineers, and once national pride is involved they can possibly make it even if it loses money,” Koshiba said. “We don’t have an impregnable wall.”\--With assistance from Jason Clenfield.To contact the reporters on this story: Pavel Alpeyev in Tokyo at email@example.com;Yuki Furukawa in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
In just over two months, Red Hat has been hit with two separate gender discrimination suits by former female employees, court records show.
Triangle Business Journal’s latest list of largest publicly traded companies combined for a market cap of $772 billion, down slightly from the $780 billion total a year ago. They are the subject of this week's top list.
Two big events took place in July for investors in International Business Machines (NYSE:IBM). On July 9, the company closed its $34 billion acquisition of Red Hat. And on July 17, IBM reported better-than-expected Q2 earnings. As a result, IBM stock gained nearly 10% during the month of July, but it has given back those gains and then some through August.Source: Shutterstock Even after a 1.39% pop on Friday -- when International Business Machines stock closed at $133.76 -- it's down 11% from the start of August and off 3% compared to where it started in July. Why has the boost from the finalization of the company's Red Hat acquisition been so short-lived? Why Red Hat Is a Big DealThe Red Hat acquisition is a big deal for IBM in every way. First is the sheer scale of the purchase. At $190 per share, it was valued at $34 billion, making it the largest acquisition in IBM's history, and the second-largest ever technology deal. The combined companies made IBM one of the biggest players in cloud computing, immediately putting it in contention with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT).InvestorPlace - Stock Market News, Stock Advice & Trading TipsRed Hat's hybrid cloud Linux software is used in data centers by 90% of Fortune 500 companies, and the company reported 2018 revenue of $2.9 billion (up 21% compared to the previous year). Investors may have been uncertain about the deal -- IBM stock took a hit after it was announced last October -- but the Red Hat purchase positioned IBM to take advantage of the growing cloud computing market. Anything that looks to the future is a positive for a tech giant that has struggled to compete in a rapidly changing IT world. * 10 Best High-Growth Stocks to Buy for Young Investors That Red Hat acquisition officially closed on July 9 and the speed with which the deal cleared regulatory hurdles likely contributed to investor enthusiasm, helping to give International Business Machines stock a short-term boost. Q2 Earnings RecapIBM's Q2 earnings were better-than-expected, but that doesn't mean they were all good news for investors. Earnings-per-share came in at $3.17, beating estimates of $3.07 and its cloud computing division delivered revenue of $5.65 billion for 3.2% growth. While the company's largest revenue division -- Global Technology Services -- saw its revenue decline to $6.8 billion, this was actually positioned as a positive. IBM says gross profit margin increased, as it is in the process of exiting from less profitable client relationships. Several segments saw double-digit revenue declines in the quarter, resulting in overall revenue of $19.2 billion being off 4.2% compared to last year.So there was some good news in there that contributed to the July IBM stock price gains, but also some causes for concern once investors had time to digest the details. Red Hat Expected to Pay Off in 2020 for IBM StockDespite the fact that the immediate boost from the closure of its Red Hat acquisition appears to have worn off, long-term prospects for IBM stock are stronger as a result. * 7 Great Small-Cap Stocks to Buy On Aug. 2, the company held an investor briefing where the impact of Red Hat to IBM's bottom line was detailed, and it looks good. Here's how the company summed up its expectations of what Red Hat will do to help growth, starting in 2020:"Bringing all of this together, IBM expects an acceleration in its financial results in 2020 and 2021 - across revenue, operating pre-tax profit and free cash flow. The company expects mid single-digit revenue growth at constant currency. This will be led by the Cloud and Cognitive Software segment, which will accelerate to double-digit growth at constant currency in 2020 with the addition of Red Hat, and an improving services revenue growth profile while continuing to drive margin expansion. All of this is accomplished while the company maintains a strong balance sheet, reducing its debt levels and continuing its commitment to a growing dividend."Despite its August slump, the IBM stock price has still seen near 18% growth in 2019. And if its record-setting acquisition of Red Hat pans out the way IBM expects it to, that trend should continue in 2020 and beyond. As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post IBM Stock Is Only Scratching the Surface With the Red Hat Deal appeared first on InvestorPlace.