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☆ Oracle gave a glimpse of the power AI has on its business. Where investors should look next
▼ + stars: | 2024-09-15 | by ( Paulina Likos | ) www.cnbc.com time to read: +10 min

For the past three years, software stocks have suffered as revenue growth softened, and investors remain skeptical about when it will return. For Oracle, that's its cloud infrastructure — a service that has improved Oracle's fundamental growth story, Walravens argued. This strategic move positioned Oracle as a key player in AI, fueling growth in its infrastructure as a services (IaaS) business. Oracle Cloud Infrastructure is central to this growth, offering a suite of services for AI-driven workloads. SAP YTD mountain SAP stock performance year-to-date.

Persons: Raimo Lenschow, Pat Walravens, Walravens, Bernstein, Mark Moerdler, tailwinds, Goldman Sachs, Amy Hood, it's, Keith Bachman, Bachman Organizations: Oracle, Nvidia, Barclays, Investors, Software, Services, Microsoft, SAP, Citizens, CNBC, Google, Oracle Cloud Infrastructure, Microsoft Microsoft, AI Services, Wall, BMO

☆ Oracle has been a 'hidden story' as they shifted to the cloud, says Bernstein's Mark Moerdler
▼ + stars: | 2024-09-13 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailOracle has been a 'hidden story' as they shifted to the cloud, says Bernstein's Mark MoerdlerMark Moerdler, Bernstein senior global software analyst, joins CNBC to discuss why he has an outperform rating on Oracle, thoughts on Adobe, and more.

Persons: Mark Moerdler Mark Moerdler, Bernstein Organizations: Oracle, CNBC

☆ Bernstein tech analyst calls Oracle his top investment idea
▼ + stars: | 2024-09-12 | by ( Sean Conlon | ) www.cnbc.com time to read: +2 min

Seeing more upside ahead, Bernstein has named Oracle a "top investment idea" for investors seeking to play the cloud trade. On Tuesday, Oracle jumped more than 11% following better-than-expected first-quarter earnings , putting its shares at a 49% gain year-to-date. ORCL YTD mountain Oracle, year-to-date In a Thursday note, analyst Mark Moerdler cited Oracle's customer mix and the quality of its workloads – both of which offer downside protection – as key to the call. "We have watched as Microsoft has quietly become the largest security software/Cloud provider, and now we are seeing some fascinating security capabilities/offerings from Oracle," he said. "Watch out security vendors, Oracle is coming."

Persons: Bernstein, Mark Moerdler, Moerdler Organizations: Oracle, Microsoft

The bank raised its price target on MercadoLibre Thursday to $2,500 from $2,225, suggesting 22% upside from Wednesday's close. The bank increased its price target to $230 from $200, implying nearly 16% upside from Wednesday's close. Supino also lifted the firm's price target to $93 a share, reflecting about 33% upside from Wednesday's close. Analyst Adam Berlin lowered his 12-month price target to $29 from $34, implying 6% downside. The investment firm's price target of $159 implies more than 2% downside from Wednesday's close.

Persons: Robert Ford Aguilar, — Michelle Fox, Wells, Wells Fargo, Eric Luebchow, Luebchow, Lisa Kailai Han, Sean Conlon, Wolfe, Peter Supino, Supino, Samantha Subin, BofA, George Staphos, a.m, Adam Berlin, Berlin, IPG, — Sean Conlon, Bernstein, Mark Moerdler, — Lisa Kailai Han, Stifel, Simon Yarmak, Andrea Pistacchi, Brandt Montour, it's, Montour, Fred Imbert Organizations: CNBC, Barclays, Bank of America, Diageo, Mercado, Mobile, Sprint, Wolfe Research, UBS downgrades, UBS, billings, GM, Pfizer, Oracle, Simon Property, Property Group, SPG, U.S, New York Stock Exchange Locations: Brazil, Mercado Pago, Wells Fargo, Wells, Roku, Berlin, America, U.S

☆ These two stocks are the best positioned software names to 'profitably leverage GenAI,' says Bernstein
▼ + stars: | 2023-11-28 | by ( Samantha Subin | ) www.cnbc.com time to read: +1 min

Bernstein thinks the two best stocks to do so are Microsoft and Adobe. "Within our coverage, MSFT , and ADOBE are best positioned to profitably leverage GenAI, as they control a big portion of their AI tech stack," wrote analyst Mark Moerdler in a Tuesday note. Both Microsoft and Adobe have benefitted in 2023 from enthusiasm around AI and its growing addressable market in the wake of ChatGPT's debut. Earlier this year, Microsoft debuted its Copilot, which brings AI capabilities to its Office suite for $30 a month . "While the $30/month price tag generates handsome profit for Microsoft, it might be hardly profitable for others who have to rent model as a service," he wrote.

Persons: Bernstein, Mark Moerdler, They've, OpenAI, — CNBC's Michael Bloom Organizations: Microsoft, Adobe, ADOBE Locations: ChatGPT

☆ Microsoft's AI boost helped cloud business outpace rivals Amazon and Google in latest quarter
▼ + stars: | 2023-10-27 | by ( Jordan Novet | ) www.cnbc.com time to read: +3 min

That's faster than Google Cloud's 22% growth and more than double the pace of expansion at Amazon Web Services, which reported 12% growth. "Today more than half of all funded generative AI startups are Google cloud customers," Alphabet CEO Sundar Pichai said on the company's earnings call Tuesday. "Our generative AI business is growing very, very quickly," Jassy said. Jassy said companies including Adidas, Booking.com , Merck and United Airlines are building generative AI apps in AWS. Still, Amazon was behind Microsoft in releasing a tool for deploying generative AI.

Persons: Satya Nadella, Mark Moerdler, Sundar Pichai, Andy Jassy, Jassy, Brian Olsavsky, Jefferies, Brent Thill Organizations: Microsoft, Google, Amazon Web Services, AWS, Bernstein Research, Adidas, Booking.com, Merck, United Airlines, OpenAI Service, Oracle, Skanska, Starbucks, Amazon Locations: OpenAI, Maersk

The AI boom has triggered a surge in spending on data centers. The AI boom has supercharged a wave of spending on data centers. AdvertisementAdvertisementThe data center boom is set to double or triple the amount of energy consumed by these data centers. A recent Cowen research report estimated that AI data centers could require more than five times the power of traditional facilities. Amazon does not disclose how many data centers it occupies, where they are located, or how much electricity they consume.

Persons: —, ChatGPT, it's, Jonathan Gray, Cowen, Marc Ganzi, Shaolei Ren, Tom Keane, Keane, Bernstein, Mark Moerdler, Jahi, Matt McCollister, Pena Popo, Blackstone, Karla Moran, Moran Organizations: Service, McKinsey, Nvidia, UC Riverside, Microsoft, Washington, Getty, Lincoln Property Company, Harrison Street, Google, Meta, Amazon, Blackstone, Income Trust, QTS Realty Trust, Amazon Web Services, AP, Phoenix Locations: America, Rural America, Loudoun Meadows, Aldie , VA, Ohio, New Albany, Columbus, Northern Virginia, Dallas, Phoenix, Silicon Valley, Chicago, Washington, DC, Virginia, New York City, Salt

☆ After Salesforce hiked its product prices by an average of 9%, some unhappy customers are considering switching to Microsoft or HubSpot
▼ + stars: | 2023-08-30 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +7 min

Already, consultants see Salesforce customers scrambling to address these price hikes. Jon Winsett, CEO and managing partner at Atlanta-based IT spending advisory NPI Financial, said his firm immediately alerted all its clients to the price increase news. "We were working with one of our accounts right as the price increase was announced, and they were gobsmacked," Winsett said. Customer relationship management software company HubSpot uses customer self-service to sell its software — a stark contrast from Salesforce's sales-driven culture. You don't need a full-time Salesforce admin when you're a HubSpot customer.

Persons: Salesforce, Marc Benioff, Adam Mansfield, — they're, HubSpot, Bernstein, Mark Moerdler, Moerdler, Jon Winsett, Winsett, Microsoft Mansfield, Mansfield, Satya Nadella Justin Sullivan, OpenAI, I've, we're, you've, that's, Yamini Rangan, HubSpot Matt Winkelmeyer, Rishi Jaluria, he'd, Jaluria Organizations: Wall Street, Microsoft, Cloud, Industries, Management, RBC Capital, Salesforce Locations: Salesforce, Atlanta, ChatGPT

☆ The cloud uses massive amounts of energy. Generative AI will be way worse. A Microsoft data center veteran warns big changes are coming.
▼ + stars: | 2023-07-14 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +7 min

Training AI models in data centers uses up to three times more energy than traditional cloud tasks. A warning from a Microsoft data center veteranA Microsoft data center. MicrosoftTom Keane, who oversaw Microsoft's cloud data centers for about two decades, recently warned about this. An AI data center will need up to three times more power than a traditional cloud facility, he estimated. "The data center of the future is not in Virginia, it's not in Santa Clara, it's not in Dallas, Texas," Ganzi said.

Persons: Marc Ganzi, Cowen, Nammo, TikTok, Jack Clark, Matthew Barakat, Shaolei Ren, Microsoft Tom Keane, Keane, Bernstein, Mark Moerdler, DigitalBridge, Ganzi, it's, Ellen Thomas Organizations: Dominion Energy, Amazon, Microsoft, Google, McKinsey, Big Tech, Financial Times, AP, Nvidia, UC Riverside Locations: Northern Virginia, Manassas , Virginia, Virginia, DataBank, Santa Clara, Dallas , Texas

☆ Oracle's cloud business, which runs TikTok, could be hurt the most from Biden's new proposed restrictions for China
▼ + stars: | 2023-07-06 | by ( Julie Bort | ) www.businessinsider.com time to read: +4 min

Most US cloud companies won't be too hurt except perhaps Oracle, which runs TikTok. US cloud computing companies are about to be the latest target in the discord between the Biden administration and China. That loophole involves cloud computing companies. They merely have to pay for cloud computing services offered by the largest cloud providers. Chinese companies have plenty of local cloud providers to use for their cloud computing needs, like Tencent and Alibaba Cloud.

Persons: Biden, Bernstein, Mark Moerdler, Moerdler, Moerdler isn't, Ampere, Larry Ellison, Joe Biden, Julie Bort Organizations: Morning, Oracle, Wall Street, Amazon Web Services, Google, Microsoft, TikTok, Nvidia, supercomputing, AMD, Twitter Locations: China, Beijing

☆ The biggest takeaways from Microsoft's courtroom showdown with the FTC over Activision Blizzard
▼ + stars: | 2023-06-30 | by ( Jordan Novet | ) www.cnbc.com time to read: +21 min

The impulse to expand Microsoft's gaming business on mobile devices at least in part inspired the Activision acquisition. The impulse to expand Microsoft's gaming business on mobile devices at least in part inspired the Activision acquisition. Jim Ryan, CEO of Sony Interactive Entertainment, wasn't happy with a Microsoft-generated list of Activision Blizzard games that would remain accessible on the PlayStation after the acquisition closes. Jim Ryan, CEO of Sony Interactive Entertainment, wasn't happy with a Microsoft-generated list of Activision Blizzard games that would remain accessible on the PlayStation after the acquisition closes. Activision Blizzard and Microsoft have agreed to terminate the deal if it's not done by July 18.

Persons: Satya Nadella, Phil Spencer, Spencer, James Weingarten, Weingarten, Jim Ryan, Sony, Ryan, Amy Hood, Bobby Kotick, Sarah Bond, Kotick, Amazon Weingarten, Bond, Tim Stuart, Nadella, Bernstein, Mark Moerdler, Hood, Stuart, it's, Jacqueline Scott Corley, she'll Organizations: Northern, Northern District of, Microsoft, Activision Blizzard, Federal Trade Commission, FTC, Sony, PlayStation, Mobile, Activision, Xbox, Zynga, Sega Sammy, Nintendo, Enix, Sony Interactive Entertainment, Management, Sony Group, Amazon, Microsoft's Xbox, Bernstein Research, Symantec, Sony PlayStation Locations: U.S, Northern District, Northern District of California, San Francisco, cybersecurity, United Kingdom, FarmVille, Asia, Japan, Tokyo

☆ Bernstein: Oracle's setup and opportunity prospects look very promising
▼ + stars: | 2023-06-12 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBernstein: Oracle's setup and opportunity prospects look very promisingMark Moerdler, Managing Partner and Senior Analyst Global Software at Bernstein, discusses his expectations for Oracle's earnings report.

Persons: Bernstein, Moerdler

☆ A.I. will change the face of Microsoft and double cloud revenue, Bernstein says
▼ + stars: | 2023-05-09 | by ( Samantha Subin | ) www.cnbc.com time to read: +4 min

Artificial intelligence is revolutionizing how companies operate and that could have major implications for Microsoft 's cloud business, according to Bernstein. As Microsoft launches new offerings and more users adopt the cloud, Bernstein expects the company's cloud revenue to more than double. Currently, AI offerings touch about 42% of the company's revenue, Bernstein said. How Microsoft can monetize AI Bernstein expects Microsoft to charge for AI where it adds "meaningful capabilities," forecasting the company could implement a 66% price increase for Copilot capabilities. Broadly speaking, Moerdler expects AI advancements in Microsoft's cloud services unit to reshape the industry — and new announcements have likely only just begun.

☆ Microsoft's bet on AI is still in its early days. But there are signs it's already paying off.
▼ + stars: | 2023-04-26 | by ( Paayal Zaveri | ) www.businessinsider.com time to read: +3 min

Microsoft's partnership with OpenAI has lead to a new wave of innovation in artificial intelligence. There are already early signs that the Microsoft-OpenAI partnership is paying off, analysts say. Analysts say there is still work to be done, but "Microsoft is leading this tech AI arms race." Wall Street analysts took that as a sign that Microsoft's big bet on AI is already leading to financial gains. Ultimately, Wedbush analyst Dan Ives said, "the AI story is still in the first inning," but, he said, "Microsoft is leading this tech AI arms race."

☆ Marc Benioff has yet to satisfy the most powerful activist investor. Elliott Management demands a 'sustainable leadership plan' for Salesforce.
▼ + stars: | 2023-03-02 | by ( Ellen Thomas | Ashley Stewart | ) www.businessinsider.com time to read: +3 min

Salesforce reported strong results, a huge new share buyback plan, and concessions for activist investors. That wasn't enough for Elliott Management, one of the most feared activist hedge funds. Benioff will have to fix Salesforce's succession crisis to appease activist investors. Salesforce reported strong results on Wednesday, announced an extra $10 billion in share buybacks, and scrapped its M&A committee, signalling no more big, pricey acquisitions. Company insiders, former employees and Wall Street analysts increasingly expect Salesforce to put a succession plan in place soon.

☆ Salesforce's strong results are impressive given activist pressure, Wall Street analysts say
▼ + stars: | 2023-03-02 | by ( Sarah Min | ) www.cnbc.com time to read: +4 min

Salesforce 's strong earnings were impressive, as it works toward improving profitability in the midst of ongoing activist pressure at the firm, according to Wall Street analysts. The results help Salesforce CEO Marc Benioff fend off pressure from activist investors such as Third Point and Elliott Management that have leaned on the firm. The new price target suggests shares can jump 43% from Wednesday's closing price of $167.35. JPMorgan's Mark Murphy also reiterated an overweight rating on the stock, and raised his price target to $230 from $200 — implying about 37% upside. Nevertheless, he maintained a neutral rating on the stock, with a $182 price target implying just 8% upside.

☆ Leaked document lays out Salesforce's plan to hit over 30% margins, directing the company to 'run lean and mean' and stop 'using culture as an excuse'
▼ + stars: | 2023-03-01 | by ( Ashley Stewart | Ellen Thomas | ) www.businessinsider.com time to read: +3 min

An internal Salesforce business plan details how the company plans to get profit margins over 30%. One obstacle toward reaching the margin is "using culture as an excuse," the plan states. A draft of Salesforce's annual planning document details how the company plans to exceed 30% profit margins, including significant cost cutting and new releases for Slack, Mulesoft, and Tableau. Insider obtained a full draft of Salesforce's V2MOM document, which stands for Vision, Values, Methods, Obstacles, and Measurements. Arjun Bhatia, an analyst at William Blair, recently noted that Salesforce's current sales and marketing spending is much higher than peers.

☆ There are growing expectations that Salesforce is readying a succession plan to appease activist investors. 'There's not a lot of people sitting on the bench,' one analyst said.
▼ + stars: | 2023-03-01 | by ( Ellen Thomas | Ashley Stewart | ) www.businessinsider.com time to read: +8 min

Analyst said any succession plan would be about giving investors "comfort" about the future. Company insiders, former employees and Wall Street analysts increasingly expect Salesforce to put a succession plan in place soon. 'If he's willing to work with the activists, then he can stay CEO'Analysts think that if a succession plan is announced soon, it won't include Benioff's immediate exit. "Benioff is Salesforce and Salesforce is Benioff," said Dan Ives, an analyst at Wedbush Securities. Bret Taylor, former Salesforce executive SalesforceTaylor's departure in late November left Salesforce with a limited bench of potential successors.

☆ ChatGPT ignited a new A.I. craze. What it means for tech companies and who's best positioned to benefit
▼ + stars: | 2023-02-04 | by ( Samantha Subin | ) www.cnbc.com time to read: +8 min

Since the launch of ChatGPT late last year, no one in the tech world can seem to stop talking about artificial intelligence. CEO Sundar Pichai announced Thursday that the company will launch its LaMDA language model and new AI features "very soon ." But it's not just technology companies rethinking AI. We combed through earnings transcripts available through FactSet to find out what some of the biggest tech companies are saying about the latest craze and who could benefit the most. Preparing for an 'AI arms race' in tech There's no question that Microsoft stands to gain from ChatGPT and the AI push on Wall Street.

☆ Microsoft's AI push has some analysts raving about the stock even after lackluster earnings
▼ + stars: | 2023-01-26 | by ( Alex Harring | ) www.cnbc.com time to read: +4 min

Microsoft 's earnings report earlier this week was largely considered dissatisfying to analysts. The company beat analyst expectations on per-share earnings while missing analysts' revenue estimate in its fiscal second quarter , Refinitiv data shows. But analysts who cover the stock weren't entirely beating up on it, pointing to AI as a bright spot in the earnings report. Analysts and company management have argued AI will improve existing products such as Azure and Bing. He said AI company Nvidia will have "derivative focus," while Arista Networks is well positioned as AI's fabric gets expanded.

☆ Wall Street likes software stocks for the long term. Here are top picks from Goldman, Citi and more
▼ + stars: | 2023-01-23 | by ( Zavier Ong | ) www.cnbc.com time to read: +4 min

Citi is also sounding a cautious tone on the sector, calling 2023 a "year of dichotomy in software." Stock picks CNBC Pro had a look at Wall Street research to find the banks' top stock picks to play the software sector. The bank said the company's already "healthy" operating margins could grow about 20%. Goldman also likes tax technology software firm Vertex for its potential to "drive higher cloud margins over time." German software firm SAP is one of Bank of America 's top picks in European software.

☆ Bernstein's Mark Moerdler on Microsoft: Its future is in software and the cloud
▼ + stars: | 2023-01-18 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBernstein's Mark Moerdler on Microsoft: Its future is in software and the cloudMark Moerdler of Bernstein joins 'TechCheck' to discuss Microsoft long term as well as his top software picks.

☆ Bernstein downgrades Salesforce, says stock could fall nearly 20% as it enters a 'growth purgatory'
▼ + stars: | 2023-01-11 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

Salesforce is falling into a "growth purgatory," and it may have some trouble clawing its way out, according to Bernstein. "Salesforce's growth is slowing and mgmt is implementing large force and cost reductions as they scramble to drive margin improvement," he wrote in a Wednesday note to clients. Much of the savings are necessary to offset slowing growth, and therefore, the big lift to margins is unlikely to occur." According to Moerdler, Salesforce's growth has been on a deceleration path for years, with a slew of acquisitions helping shield the downward cycle. Salesforce's stock plummeted in 2022, falling nearly 48% as growth names took a hit in an environment defined by rising interest rates and recession fears.

☆ How the PC slowdown could impact Microsoft and what it means for our investment thesis
▼ + stars: | 2022-10-17 | by ( Kevin Stankiewicz | ) www.cnbc.com time to read: +7 min

In a note to clients Monday, Bernstein dove deep into Microsoft's Windows business after declining PC shipment data sparked renewed worries about its implications for the tech giant. By contrast, Bernstein estimates only around 20% of Windows revenue comes from consumer PCs. Club take The decline in PC sales after a few booming years during the Covid pandemic has been on our radar for months. However, Bernstein made an interesting case about the makeup of Windows revenue, and we see how the analysts could conclude that Microsoft won't be the hardest hit by the PC slowdown. A global recession is definitely one of the biggest near-term risks to Microsoft's results, so we'll want to hear how Microsoft's clients are acting.

☆ 8 companies Amazon, Microsoft, or Google might buy as they shop for deals amid the market downturn, including Workday, Unity, and Roku
▼ + stars: | 2022-09-15 | by ( Belle Lin | ) www.businessinsider.com time to read: +13 min

That means Amazon Web Services, Microsoft Azure, and Google Cloud could be poised for a merger-and-acquisition spree. As for cloud acquisitions, analysts said Amazon's cloud unit didn't often buy companies. Cybersecurity has been a greater focus for Microsoft, AWS, and Google Cloud after the hack of the IT-software company SolarWinds in 2020. In 2019, Google purchased the data-analytics company Looker for $2.6 billion in cash under Google Cloud CEO Thomas Kurian. With Kurian at the helm, bringing with him the Oracle acquisition playbook, Google Cloud may now have a bigger M&A appetite.

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