Matthew Hedberg, an analyst of RBC Capital cut down his rating on Oracle Corporation (NYSE:ORCL) stock from outperform to sector perform. Keith Weiss of Morgan Stanley also reduced his rating on the share from overweight to equal weight and price target of $36. After these negative notes, the company shares were down 0.96 cents, or 2.78 percent, at $33.60 yesterday. According to Weiss’s note, lack of catalysts is not the only problem. The firm’s hardware products have seen their growth rate decline more quickly than we anticipated, while Fusion Applications software offering is seeing weaker and weaker momentum. Weiss notes, Fusion is a mix of functionality put together from several current company products, and it can be set up in a firm’s data center, or as a hosted, cloud computing service.
Hedberg writes: “We believe cloud computing is troublesome to legacy application vendors and should continue to gain share while IaaS and PaaS vendors could pose a threat to the middleware business. Lower cost alternative data stores may pose a long term threat to the Oracle Corporation (NYSE:ORCL)’s control on data management.”
Christopher Rolland, an analyst of FBR, initiated coverage of ARM Holdings plc (ADR) (NASDAQ:ARMH) stock with an outperform rating, and a price target of $62, writing that the industry has found a new standard, and the chip maker should benefit through massive growth in license and royalty revenues over the next decade.
Analyst thinks with the help of licensees, the firm will make only limited penetration into the personal computer market. But Rolland thinks ARM Holdings plc (ADR) (NASDAQ:ARMH)’s technology can take significant share of the server market, through the rise of so-called micro servers. Rolland writes: “We believe the company will ultimately capture almost ten percent of personal computer units, as Microsoft Corporation (NASDAQ:MSFT) further improves its OS for the chip maker. But this may only account for approximately 30 million units and may hold only a few percentage of total revenue”.