The Zacks Analyst Blog Highlights: Amazon, Microsoft, Alphabet and International Business Machines

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For Immediate Release Chicago, IL – July 31, 2017 – 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 Amazon (NASDAQ: AMZN[1]Free Report[2] ), Microsoft (NASDAQ: MSFT[3]Free Report[4] ), Alphabet (NASDAQ: GOOGL[5]Free Report[6] ) and International Business Machines (NYSE: IBM[7]Free Report[8] ). Today, Zacks is promoting its ”Buy” stock recommendations. Get #1Stock of the Day pick for free.[9] Here are highlights from Friday’s Analyst Blog:

The Only Direction Cloud Companies Are Going Is Up We now have earnings reports from all the major cloud infrastructure vendors – Amazon (NASDAQ: AMZN[10]Free Report[11] ), Microsoft (NASDAQ: MSFT[12]Free Report[13] ), Alphabet (NASDAQ: GOOGL[14]Free Report[15] ) and International Business Machines (NYSE: IBM[16]Free Report[17] ) – so it’s time to compare notes on how they did this quarter. To be fair, they all have huge businesses other than that of selling infrastructure as a service, so overall results aren’t representative, or even indicative of the explosive growth they’re seeing in the cloud.

And because of the size of their overall businesses and the way they categorize products, they aren’t bound by regulation to report the cloud business separately. Amazon Still Leads the Pack Amazon, being a retailer, can clearly segregate the cloud business from the rest.

Being the market leader with head and shoulders above the others, AWS is also of a size that requires separate disclosure. So here we have some numbers: AWS grew 42% over the June quarter of the prior year, which was however less than the 47% increase in related operating expenses. But a £16.4 billion annualized revenue run rate is nothing to scoff at.

What’s more, the higher expenses may be expected to fuel continued growth in the future. For good measure, management listed the new customers in the quarter that included Ancestry, the global leader in family history and consumer genomics; Hightail, a virtual workspace for creative collaboration and file sharing; and California Polytechnic State University that transferred all of their operations to AWS as well as Discovery Communications, Morningstar, BP and Zillow Group that transferred “significant” portions. It also provided a long list of companies using its AI and machine learning solutions.

In addition to the 16 infrastructure regions (44 availability zones) it now operates, Amazon said that come 2018, it would add another infrastructure region in Hong Kong and a second GovCloud region in the U.S. It would also add 14 availability zones. Microsoft Isn’t Taking It Easy

Unlike Amazon, Microsoft doesn’t put all of its cloud business neatly into a separate segment and instead, tries to convince investors that all of its businesses are increasingly geared for the cloud. But other than the segmental discussion, it does tell us about its infrastructure business (Azure), which in the last quarter jumped 97% (98% in constant currency). Azure’s growth rate is higher than AWS’s but Azure includes both IaaS and PaaS, so the two aren’t exact comparables.

The company is also seeing momentum in Office 365, the SaaS version of its Word, Excel and other productivity software, which grew 43% and is seeing strong interest in Microsoft 365 Enterprise (a bundled subscription for Office 365 Enterprise, Windows 10 Enterprise, and Microsoft’s Enterprise Mobility and Security) with a business version set to launch later this fall. Microsoft’s customer list for the quarter included AXA Global, KPMG, Dun & Bradstreet, Hearst, Walgreens, T-Mobile, travel technology provider Sabre and Box (for AI) and Baidu (for autonomous driving), and (for its distributed database service Azure Cosmos DB). Its ability to provide a hybrid solution, its breadth of offerings across IaaS, PaaS and SaaS, its AI capabilities, existing commercial relationships and installed base remain strengths.

Microsoft became the first company to offer cloud services across 40 regions globally. We Know Less About Google Cloud Google’s cloud business is smaller and also a very small part of its overall business.

So all we got to know this quarter is that GCP is its fastest growing segment, G-Suite continues to grow strongly and that business deals worth more than 500K increased three-folds over the year-ago quarter with growing success at large enterprise customers in regulated sectors. Also, that the company is trying to scale up as quickly as possible and is investing in R&D, sales and marketing to sustain the momentum. Management also mentioned the expansion of its collaboration with SAP and an important partnership with Nutanix, which will integrate its solutions with Google Cloud and help it provide hybrid solutions using containers and Kubernetes.

Google is also expanding its Cloud regions and in the last quarter, added Northern Virginia, Singapore, Sydney and London. IBM Still Reaching for a Turnaround IBM said that the company’s cloud revenue on a trailing twelve month basis had crossed £15 billion to nearly 20% of IBM’s revenue.

IBM generated strategic imperatives, including cloud and analytics revenue of £8.8 billion, which is about 45.6% of the £19.3 billion it generated in the quarter, so the crossover point seems near. These two categories comprise the bulk of its strategic imperatives effort, so the growth of a respective 17% and 6% from the year-ago quarter was encouraging. The other focus areas are cloud security, mobile and social.

IBM’s strength is its ability to leverage the products and relationships in its legacy business. None of these stocks are buys right now meaning that they don’t have a Zacks Rank #1 (Strong Buy) or #2 (Buy). But if you’re interested in good stock picks, you may want to check out the complete list of today’s Zacks #1 Rank stocks here[18]

The Hottest Tech Mega-Trend of All Last year, it generated £8 billion in global revenues. By 2020, it’s predicted to blast through the roof to £47 billion.

Famed investor Mark Cuban says it will produce “the world’s first trillionaires,” but that should still leave plenty of money for regular investors who make the right trades early. See Zacks’ 3 Best Stocks to Play This Trend >>[19] About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance.

Recommendations and target prices are six-month time horizons. Strong Stocks that Should Be in the News Many are little publicized and fly under the Wall Street radar.

They’re virtually unknown to the general public. Yet today’s 220 Zacks Rank #1 “Strong Buys” were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.[20]

Get the full Report on AMZN – FREE[21] Get the full Report on MSFT – FREE[22] Get the full Report on GOOGL – FREE[23]

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor.

It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

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The S&P 500 is an unmanaged index. Visit[29] for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

International Business Machines Corporation (IBM): Free Stock Analysis Report[31], Inc. (AMZN): Free Stock Analysis Report[32] Alphabet Inc. (GOOGL): Free Stock Analysis Report[33] Microsoft Corporation (MSFT): Free Stock Analysis Report[34]

To read this article on click here.[35]

Zacks Investment Research[36]


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


  1. ^ AMZN (
  2. ^ Free Report (
  3. ^ MSFT (
  4. ^ Free Report (
  5. ^ GOOGL (
  6. ^ Free Report (
  7. ^ IBM (
  8. ^ Free Report (
  9. ^ Get #1Stock of the Day pick for free (
  10. ^ AMZN (
  11. ^ Free Report (
  12. ^ MSFT (
  13. ^ Free Report (
  14. ^ GOOGL (
  15. ^ Free Report (
  16. ^ IBM (
  17. ^ Free Report (
  18. ^ the complete list of today’s Zacks #1 Rank stocks here (
  19. ^ See Zacks’ 3 Best Stocks to Play This Trend >> (
  20. ^ See these high-potential stocks free >>. (
  21. ^ Get the full Report on AMZN – FREE (
  22. ^ Get the full Report on MSFT – FREE (
  23. ^ Get the full Report on GOOGL – FREE (
  24. ^ Get the full Report on IBM – FREE (
  25. ^ (
  26. ^ (
  27. ^ (
  28. ^ (
  29. ^ (
  30. ^ Click to get this free report (
  31. ^ International Business Machines Corporation (IBM): Free Stock Analysis Report (
  32. ^, Inc. (AMZN): Free Stock Analysis Report (
  33. ^ Alphabet Inc. (GOOGL): Free Stock Analysis Report (
  34. ^ Microsoft Corporation (MSFT): Free Stock Analysis Report (
  35. ^ To read this article on click here. (
  36. ^ Zacks Investment Research (

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