Technology Archives - Page 15 of 25

One Stop Systems (OSS) – Reports Fourth Quarter and Fiscal Year Results

Posted on March 25, 2024March 25, 2024 by cpereira@noblefcm.com

Monday, March 25, 2024

One Stop Systems, Inc. (OSS) designs and manufactures innovative AI Transportable edge computing modules and systems, including ruggedized servers, compute accelerators, expansion systems, flash storage arrays, and Ion Accelerator™ SAN, NAS, and data recording software for AI workflows. These products are used for AI data set capture, training, and large-scale inference in the defense, oil and gas, mining, autonomous vehicles, and rugged entertainment applications. OSS utilizes the power of PCI Express, the latest GPU accelerators and NVMe storage to build award-winning systems, including many industry firsts, for industrial OEMs and government customers. The company enables AI on the Fly® by bringing AI datacenter performance to ‘the edge,’ especially on mobile platforms, and by addressing the entire AI workflow, from high-speed data acquisition to deep learning, training, and inference. OSS products are available directly or through global distributors. For more information, go to www.onestopsystems.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Transformational Year. 2023 was a transformational year for OSS. The low margin digital business went away, a new management team and Board members were installed, and the Company is now firmly focused on large and rapidly growing global markets driven by AI and ML.

4Q23 Results. Revenue totaled $13.2 million, slightly above our $13 million estimate, but down 28% y-o-y, reflecting the continued runoff of the Disguise business, which contributed $3.1 million of revenue in the year ago quarter. Gross margin, however, rose 640 basis points to 33.7%. OSS net loss was $277,560, or a loss of $0.01/sh in the quarter, compared to a net loss of $3.3 million, or a loss of $0.16/sh last year. Adjusted EPS was $0.01/sh compared to a net loss of $0.14/sh last year. We had forecasted a loss of $0.07/sh.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Comtech Telecommunications (CMTL) – Some Encouraging News

Posted on March 25, 2024March 25, 2024 by cpereira@noblefcm.com

Monday, March 25, 2024

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. The Telecommunications Transmission segment provides satellite earth station equipment and systems, over-the-horizon microwave systems, and forward error correction technology, which are used in various commercial and government applications, including backhaul of wireless and cellular traffic, broadcasting (including HDTV), IP-based communications traffic, long distance telephony, and secure defense applications. The Mobile Data Communications segment provides mobile satellite transceivers, and computers and satellite earth station network gateways and associated installation, training, and maintenance services; supplies and operates satellite packet data networks, including arranging and providing satellite capacity; and offers microsatellites and related components. The RF Microwave Amplifiers segment designs, develops, manufactures, and markets satellite earth station traveling wave tube amplifiers (TWTA) and broadband amplifiers. Its amplifiers are used in broadcast and broadband satellite communication; defense applications, such as telecommunications systems and electronic warfare systems; and commercial applications comprising oncology treatment systems, as well as to amplify signals carrying voice, video, or data for air-to-satellite-to-ground communications. The company serves satellite systems integrators, wireless and other communication service providers, broadcasters, defense contractors, military, governments, and oil companies. Comtech markets its products through independent representatives and value-added resellers. The company was founded in 1967 and is headquartered in Melville, New York.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New T&W President. Thursday after the market close, Comtech announced the hiring of Jeff Robertson as the Company’s new President of the Terrestrial and Wireless Networks business segment. Prior to joining Comtech, Mr. Robertson served as President and CEO of Intrado Life Safety, a firm specializing in first responder technology in North America.

Significant News. We view the hiring of Mr. Robertson positively on a couple of fronts. First, Intrado is a direct competitor to Comtech and we expect Mr. Robertson to be familiar with Comtech’s T&W capabilities. Mr. Robertson’s choice of joining Comtech speaks positively about Comtech’s T&W business, in our view. Secondly, his hire indicates that top level executives still view Comtech as an attractive option to work, even given the recent challenges.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Reddit’s Soaring IPO: From Online Forums to $9.5 Billion Company

Posted on March 22, 2024March 22, 2024 by slightbourne@noblecapitalmarkets.com

The internet forum that helped launch the meme stock frenzy is now a multi-billion dollar public company itself. Reddit, the hugely popular online community made up of thousands of niche message boards, had a blockbuster stock market debut on Thursday.

Shares of Reddit, trading under the ticker RDDT on the New York Stock Exchange, skyrocketed 48% to close at $50.44, giving the company a lofty valuation of $9.5 billion. The explosive first day performance continues the hot streak for newly public tech companies in 2024 and underscores insatiable investor demand for businesses involved with artificial intelligence.

Reddit priced its initial public offering on Wednesday at $34 per share, raising around $750 million in the process with the company itself collecting $519 million. That IPO price was already at the top end of the expected range amid high demand, valuing Reddit at $6.5 billion on an exit from the private markets.

The robust valuation is a major achievement for Reddit, which was founded nearly 20 years ago in 2005 by the entrepreneur duo of Alexis Ohanian and current CEO Steve Huffman. For years, the site with its stark design and freewheeling discussion forums operated on a shoestring budget.

But Reddit’s popularity and influence exploded in recent years, fueled by the rise of viral meme culture and Internet subcultures. The company reported $804 million in revenue for 2023, up 20% from the prior year, as it started more aggressively monetizing the engaged audiences on its platform through advertising and other services.

While still unprofitable with a $90.8 million net loss last year, Reddit is now setting itself up as a major media and technology player by going public. It is the first major social platform to hit the public markets since Pinterest’s IPO in 2019.

“This is a huge milestone for Reddit and the team,” said CEO Steve Huffman, speaking to CNBC from the NYSE trading floor on the company’s debut day. “Our people and our community have built an internet culture that is now being embraced by the world.”

Reddit’s successful IPO provides an exit for some of the company’s longtime venture capital investors and big corporate backers like Tencent and Condé Nast’s parent company. But Huffman said Reddit also allocated a portion of shares in the IPO for its most devoted users and volunteer moderators who help run the site’s myriad discussion boards.

“The people make Reddit what it is,” said Huffman. “This is a chance for our most passionate folks to own a piece of that.”

Looking ahead, Reddit sees big growth potential in data licensing, particularly providing user content to artificial intelligence companies to train their language models and other software. The company revealed it has already inked data deals worth over $200 million in the next few years.

However, Reddit is facing a probe from the Federal Trade Commission over its practices of selling user data to AI firms. Regulators are examining whether proper disclosure was made to users about how their posts and comments would be monetized.

Privacy and safety issues are nothing new for Reddit, which has had to crackdown on toxic content and hate speech proliferating across its unruly message board communities. Huffman acknowledged those challenges, including the role Reddit played at the center of the meme stock mania that sent shares of GameStop and AMC soaring in bizarre market frenzies in 2021.

But as evidenced by its IPO haul, Reddit has still managed to attract both users and investors by providing an online home for all sorts of niche interests and subcultures to flourish – whether that’s stocks, cryptocurrencies, sports, hobbies, activism or adult content. And Reddit sees plenty of runway for growth by continuing to serve as the internet’s open marketplace of ideas.

“There are so many people around the world looking for their communities,” said Huffman. “We provide that, and we’re just getting started.”

Release – Nominations Open for 2024 ISG Women in Digital Awards

Posted on March 19, 2024March 19, 2024 by aweinsoff@channelchek.com

Research News and Market Data on III

3/19/2024

Annual program recognizes women’s achievements in the digital world for the Americas, EMEA and Asia Pacific and India regions

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today announced that nominations are open for the third annual ISG Women in Digital Awards program, recognizing exceptional leadership among women in digital roles.

“ISG is delighted to open nominations for the 2024 ISG Women in Digital Awards program,” said Michael P. Connors, chairman and CEO, ISG. “We have been inspired by the women nominated for our 2022 and 2023 awards and excited by the levels of participation in every region. We look forward to recognizing another class of exceptional women in 2024.”

The awards program was launched in 2022 in the Americas, and expanded in 2023 to the Europe, Middle East and Africa (EMEA) and Asia Pacific and India regions. Last year, more than 330 exceptional women were nominated in all three regions and detailed in an ISG Women in Digital eBook.

An independent panel of judges for each region, drawn from the enterprise, provider and advisory communities, will evaluate nominations and select the 2024 winners in each region. Winners will be named in five categories:

Digital Innovator: for making a significant impact on an organization, business or client through creative use of digital solutions;
Rock Star Leader: for leading a major transformation with significant business impact and demonstrating exceptional leadership skills;
Women’s Advocate: for playing an active role guiding women to succeed in the digital world;
Rising Star: for demonstrating exceptional and continuous growth, with increasing levels of leadership, responsibility and sphere of impact, and
Digital Titan of the Year: recognizing the most outstanding “Woman in Digital” for 2024 in each region, chosen from all nominees.

In 2023, leaders with Johnson Controls, Kaiser Permanente, LTIMindtree, McKesson, the National Renewable Energy Laboratory, Amazon, Atos, Foundever, Kinseed, Unisys, ANZ Group Holdings, Australia Post, Silverlake Axis, Tech Mahindra and VicRoads were named ISG Women in Digital Award winners across the regions.

For 2024, the judging panel for the Americas will include Chris Putur, executive vice president, Technology and Operations, REI Co-Op (retired), and a member of the ISG Board of Directors; Kim Ewald Hurry, advisor relations leader, Kyndryl; Diane Schwarz, vice president and CIO, Johnson Controls, and Beth Thomas, partner, ISG Enterprise Change.

Pooja Arora, client partner, Tech Mahindra; Isabelle Roux-Chenu, corporate vice president, Capgemini (retired), and Lois Coatney, partner and president, ISG EMEA Sales and Consulting, will judge the EMEA awards.

Richa Vijayraj, PhD, director of ESG and Sustainability Transformation, Ramco Systems, and director, Impact HQ Australia, and Namratha Dharshan, chief business leader, ISG Provider Lens™, will be among the judges for the Asia Pacific and India awards.

Nominations may be submitted through the ISG Women in Digital Awards website through May 13. Winners will be announced during live virtual awards ceremonies on September 5 for the Americas; September 12 for EMEA, and September 19 for Asia Pacific and India.

“Women are making significant contributions in digital and technology roles,” said Kimberly Tobias, ISG director and program leader, ISG Women in Digital. “The ISG Women in Digital Awards celebrate their successes and the impact of their work, while aiming to encourage future generations to pursue careers in the digital world.”

The ISG Women in Digital Awards are part of the ISG Women in Digital community, established in 2018 to provide a platform to exchange practical advice and innovative ideas on diversity and advancement in the workplace. The community hosts a LinkedIn page, an ongoing ISG Digital Dish podcast series, and regular events for ISG employees and the greater IT and business services industry.

For more information about the ISG Women in Digital Awards, visit the program website or contact ISG.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Source: Information Services Group, Inc.

Comtech Telecommunications (CMTL) – Mixed Quarterly Results, Many Questions Remain

Posted on March 19, 2024March 19, 2024 by cpereira@noblefcm.com

Tuesday, March 19, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Refi Overhang. The uncertainty created by the refinancing is impacting business results. For the first time in six quarters, sequential revenue declined with quarterly revenue barely exceeding year ago levels. Lower Space and Satellite segment revenue reflects order delays and supply chain constraints largely stemming from the refi overhang. Lower R&D expenses and One Comtech savings, along with a one-time gain, resulted in positive operating income for the third consecutive quarter.

2Q24 Results. Revenue was $134.2 million, flat y-o-y and below guidance of up 1% – 3% sequentially. We were at $154 million. Adjusted EBITDA totaled $15.1 million, versus $11.3 million in 2Q23. We were at $18.9 million. Comtech reported a net loss of $30.5 million, or a loss of $1.07/s, compared to a net loss of $6.5 million, or $0.23/s last year. Adjusted loss was $0.15/sh versus EPS of $0.09. We had forecast a net loss of $950,000, or a loss of $0.03 per share, and adjusted EPS of $0.28.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

Apple Ramps Up AI Capabilities With Acquisition of Startup DarwinAI

Posted on March 15, 2024March 15, 2024 by slightbourne@noblecapitalmarkets.com

Apple is making a concerted push to bring generative artificial intelligence capabilities to its core products and services, as evidenced by its recent acquisition of Canadian startup DarwinAI.

The iPhone maker purchased the AI company earlier this year, according to a report from Bloomberg. While Apple remained characteristically tight-lipped about the deal’s financial terms or strategic rationale, the move signals Apple is accelerating its efforts to match rivals like Microsoft and Google in deploying advanced AI across its offerings.

DarwinAI specialized in using artificial intelligence for visual inspection and analysis during the manufacturing process. Its technology served customers across multiple industries to automatically detect defects and anomalies in components through AI-powered computer vision models.

As part of the acquisition, dozens of DarwinAI employees have been absorbed into Apple’s artificial intelligence division, the report states. This influx of AI talent and technical expertise could prove critical as Apple looks to develop its own large language models and generative AI applications.

Alexander Wong, an AI researcher from the University of Waterloo who co-founded DarwinAI, has assumed a director role overseeing portions of Apple’s AI group. His background aligns with DarwinAI’s focus on building compact, efficient AI systems that can run on-device without constant cloud connectivity.

This thrust toward making AI work smoothly and privately on iPhones, iPads and Macs represents a key priority for Apple as it races to integrate generative AI across its mobile operating systems and productivity software over the next year.

At the company’s annual shareholder meeting in early March, CEO Tim Cook confirmed Apple’s intentions to “break new ground in generative AI in 2024,” citing the “breakthrough potential” and “transformative opportunities” it creates for enhancing user experiences around productivity, problem-solving and more.

Specific areas where Apple may deploy generative AI span Siri’s voice assistant capabilities, automated summarization in apps like Mail and Messages, and content creation tools within Pages, Keynote and other office productivity programs. The technology could even extend to areas like automated music playlist curation.

For the AppleCare product support team, generative AI may be leveraged to better assist customers troubleshoot technical issues by suggesting solutions based on conversational prompts. This could represent a major upgrade over today’s more manually intensive processes.

Ultimately, Apple’s biggest advantages revolve around its ability to build tighter hardware/software integration and maintain strict privacy guardrails unavailable to cloud-based rivals. The company aims to run its generative AI models directly on user devices rather than routing data to remote servers – a key differentiator from competitors like Microsoft and Google.

“We see incredible breakthrough potential for generative AI, which is why we’re currently investing significantly in this area,” Cook told shareholders.

Still, Apple faces an uphill battle catching up to the generative AI leaders. While the iPhone maker’s cautious approach focuses on curating secure AI experiences, companies like OpenAI, Anthropic and Google have rapidly advanced their public-facing products and pushed the boundaries of what’s possible with large language models.

Microsoft has already integrated AI co-pilots across its entire suite of Office apps and cloud services through partnerships with OpenAI, Anthropic and others. Google has made generative AI like Bard a centerpiece of its efforts to modernize search and productivity tools.

With developers and companies increasingly exploring AI customization and co-pilots that can streamline workflows, Apple may feel pressure to open up its ecosystem to third-party generative AI tools in the near future.

The DarwinAI acquisition represents an early step for Apple to transform itself into a formidable AI player. But just like the company’s iconic “Get a Mac” ads from years past, it may take some additional star power and rebranding to recast Apple as the face of consumer-friendly, privacy-focused artificial intelligence going forward.

Conduent Inc. (CNDT) – Peering Through The Fog Of Its Transition

Posted on March 14, 2024March 14, 2024 by cpereira@noblefcm.com

Thursday, March 14, 2024

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating Coverage. We are initiating coverage with an Outperform rating and a $9 price target. While our initial recommendation is based on a sum of the parts analysis, we believe that the shares will eventually reflect its attractive ongoing businesses following its current rationalization and streamlining of its portfolio.

A transitional story. Since spinning off from Xerox in 2017, the company has sold several businesses, changed key members of the management team and simplified the business. Importantly, in the second half of 2023, the company announced the divestitures of three businesses that are expected to close in the first half of 2024. While the transitional story is not complete, there appears to be light at the end of the tunnel.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Comtech Telecommunications (CMTL) – A CEO Change

Posted on March 14, 2024March 14, 2024 by cpereira@noblefcm.com

Thursday, March 14, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

CEO Change. Yesterday, in a surprise move, Comtech’s Board of Directors terminated Ken Peterman as President and CEO. Mr. Peterman also will cease to serve on the Board. Mr. Peterman’s termination was for conduct unrelated to Comtech’s business strategy, financial results, or previously filed financial statements, according to the Company. The Board appointed John Ratigan, Chief Corporate Development Officer (CCDO), as interim Chief Executive Officer, effective immediately.

Ratigan Background. Mr. Ratigan, a former Chief Executive Officer, is an accomplished executive who brings over three decades of experience and senior leadership expertise across the global satellite technology sector. He has an extensive background in satellite communications, as well as a deep familiarity with Comtech, having spent ten years at EF Data Corp. prior to its acquisition by Comtech in July 2000. Mr. Ratigan was named CCDO in November 2023.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

TikTok Bill Sends Shockwaves Through Tech World

Posted on March 13, 2024March 13, 2024 by slightbourne@noblecapitalmarkets.com

The House of Representatives has fired a major salvo in the battle over TikTok, passing legislation that could lead to a nationwide ban of the wildly popular social media app. The bill, which passed with bipartisan support by a 352-65 vote, gives ByteDance, TikTok’s Chinese parent company, a stark choice – divest its ownership of TikTok or see the app effectively prohibited from operating in the United States.

This dramatic escalation in Washington’s war on TikTok, driven by concerns over data privacy and the app’s perceived ties to the Chinese government, has sent shockwaves rippling through Silicon Valley and Wall Street. While the bill’s future remains uncertain as it heads to the Senate, the specter of losing access to one of the world’s largest markets has tech giants and investors on edge.

For the big tech behemoths like Apple and Google who control the app stores, a TikTok ban could be a double-edged sword. On one hand, removing TikTok opens up their platforms to competitors eager to fill the void. But it also sets a concerning precedent of the government dictating what apps can operate, potentially opening the door to bans on other apps down the line.

The fallout could be even more severe for ByteDance and TikTok. Analysts estimate that a forced sale of TikTok’s U.S. operations could fetch a staggering $60 billion or more given the app’s massive stateside user base and potential for future monetization. However, ByteDance may choose to remove TikTok from the U.S. entirely rather than divest it.

Such a development would be a seismic disruption not just for TikTok’s core business, but for the legions of creators, influencers, and businesses who have built audiences, brands, and revenue streams on the platform. Many are already working feverishly to diversify away from TikTok in anticipation of a potential ban.

The ripple effects could be felt across the tech sector and extend to adjacent industries like entertainment, advertising, and media that have been reshaped by the rise of TikTok and other social apps. Any mass exodus of users, creators and brands from TikTok would reshuffle the digital landscape in unpredictable ways.

On Wall Street, tech investors are scrambling to gauge the impact across portfolios. While some think established players like Meta could benefit from TikTok’s potential exit, others worry about the broader chilling effect on innovation from a precedent-setting ban of a consumer app over national security concerns.

Prominent Republican financier Keith Rabois summed up the stakes, declaring the TikTok bill an “IQ test” for lawmakers and vowing to withhold donations from those who oppose it. The tensions highlight how the issue has become a political lightning rod stretching beyond just the tech world.

As the bill moves to the Senate, the ultimate resolution remains unclear. TikTok has defiantly pushed back, framing the bill as a violation of free speech. The Biden administration has stopped short of endorsing an outright ban while reiterating data security concerns. And former President Trump, who tried to ban TikTok in 2020, expressed reservations about handing a competitive windfall to Facebook.

What is certain is that Congress has now made its opening gambit to bring the hammer down on TikTok and its Chinese ownership. The shock waves from that decision will continue reverberating across the tech industry and markets as they brace for the uncharted waters ahead.

One Stop Systems (OSS) – Expanding the Opportunity Set

Posted on March 13, 2024March 13, 2024 by cpereira@noblefcm.com

Wednesday, March 13, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New Win. One Stop Systems has secured a pilot project to provide a liquid immersion-cooled data storage system for use on a deployable ground station. Management expects the project to lead to follow-on production orders. Yesterday’s announcement follows the Company’s recently announced direct to chip liquid cooled solution for a foreign navy submarine application, expanding OSS’ market leading cooling solution approaches for rugged high performance computing at the edge.

A Couple of Firsts. The win was procured through a global defense prime contractor and represents the first liquid immersion-cooled high-performance compute solution for a U.S. intelligence agency mobile ground station application. It also represents a new intelligence community end user for OSS.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Tech Titans Regain Their Luster as Oracle Stock Surges Toward Record

Posted on March 13, 2024March 13, 2024 by slightbourne@noblecapitalmarkets.com

The once high-flying tech giants are back in vogue on Wall Street. After years of being written off as passé in the face of disruptive upstarts, the established behemoths are reminding investors why their cash-gushing businesses should never be counted out.

On Tuesday, it was Oracle’s turn to shine. Shares of the legacy database software provider spiked more than 12% in trading, putting Oracle stock on pace for a record high close above $127. The surge came just a day after the company reported fiscal third-quarter results that handily beat earnings estimates, fueled by blistering growth in its cloud computing segment.

Oracle’s blockbuster performance adds to the growing buzz around technology’s old guard in 2024. After watching shares of Microsoft, Apple, Amazon and Alphabet get pummeled last year, investors have been re-embracing these highly profitable tech titans thanks to their prodigious free cash flows, resilient business models and aggressive capital return programs.

The renaissance has been particularly striking given how deeply unfashionable these names were just a year ago. Investors had been obsessing over the latest buzzworthy upstarts in areas like artificial intelligence, cloud computing, cybersecurity and electric vehicles. The established giants were dismissed as stodgy has-beens.

But with recession fears mounting, markets have been gravitating back toward these cash-rich juggernauts and their ability to keep generating profits. Microsoft shares are up nearly 20% year-to-date, while Apple is up around 25%. Even former whipping boy IBM has staged an impressive comeback, surging over 15% in 2024.

“The big tech gorillas are back in control,” said King Lip, chief investment strategist at Bakerie Capital. “When the economy gets shaky, investors want to hide out in companies generating boatloads of cash with little risk. That’s exactly what these giants provide.”

Oracle, Microsoft and several other tech stalwarts have also been riding a bullish cloud computing wave, as businesses ramp up spending to modernize their legacy systems and brace for an AI boom many expect will require powerful cloud infrastructure.

In its earnings report on Monday, Oracle said revenue from its cloud services and license support segment jumped 12% in the latest quarter. CEO Safra Catz touted the company’s cloud infrastructure business as having “great leverage” for artificial intelligence workloads.

Several Wall Street analysts raised their price targets on Oracle stock on Tuesday, citing enthusiasm over the company’s cloud momentum and strong positioning for an AI-driven renaissance in database migration.

“We’re encouraged Oracle’s massive installed base could act as a catalyst for AI cloud adoption, leading to a re-acceleration in its cloud growth trajectory over the next 12-24 months,” analysts at investment firm Maxim wrote on Tuesday.

While Oracle currently trails the cloud infrastructure leaders like Amazon Web Services, Microsoft Azure and Google Cloud, many expect rising demand for AI applications to be a boon for all major cloud platforms in coming years.

Microsoft has been an early leader in this space, striking partnerships with OpenAI, Anthropic and others to embed intelligent capabilities into its Office productivity suite and cloud services. Google Cloud has also made AI a key focus area under new CEO Thomas Kurian.

Within the semiconductor space, Nvidia shares have already more than doubled this year as investors bet on surging demand for its high-powered chips from cloud providers building out AI infrastructure. AMD has also been a big winner for similar reasons.

Of course, the rekindled passion for big tech could easily flame out if macroeconomic conditions deteriorate more than expected and cash flows get crunched. Valuations are hardly bargain-basement across this segment of the market.

But for now, investors seem more than happy to ride the cash flow train with these entrenched players as they gear up for an AI-driven future likely to boost their cloud-related business lines. After so many years of being shunned for fresh new faces, the elder statesmen of tech have re-established their importance in an uncertain economic climate.

Information Services Group (III) – Waiting Out the Delays

Posted on March 11, 2024March 11, 2024 by cpereira@noblefcm.com

Monday, March 11, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Continued Challenging Environment. Client decision making drove a decrease in performance for ISG in the fourth quarter. However, it was not just the Company experiencing this, the IT and business services industry felt the squeeze as well. We believe the Company’s recurring revenues (now 43% of total sales) and the expansion of its AI services will allow ISG to push through an expected challenging first half in 2024.

Full Year Results. Revenue increased 2% to $291.1 million for the year, with the Americas segment showing growth while Europe and Asia Pacific decreased from last year. Net income was $9.8 million, or $0.20 per share excluding a bad debt reserve. Adjusted EBITDA was $37.7 million or a margin of 12.9%.

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Information Services Group (III) – First Look into the Fourth Quarter

Posted on March 8, 2024March 8, 2024 by cpereira@noblefcm.com

Friday, March 08, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

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Growth in a Down Industry. For the year, the IT and business services industry has been down 6% in revenue while ISG grew its topline by 2%. We believe the growth is a testament to the Company’s focus on recurring revenues with such revenues being $125 million for the year, up 16% compared to last year, through its platforms such as ISG GovernX and ISG ProBenchmark. Recurring revenues now represent 43% of ISG’s overall revenue, up 500 basis points from the prior year.

Fourth Quarter Results. Management reported revenues of $66.2 million for the quarter, below last year’s revenue of $74.2 million and below our estimate of $69.0 million. Slower decision making from clients resulted in revenue being pushed to the right for the Company. Driven by a $4.8 million bad-debt reserve taken in 4Q23, net loss was $2.9 million, or $0.06/sh, versus net income of $4.3 million, or $0.09/sh in 4Q22. We estimated net income of $2.6 million, or $0.05/sh.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).