News and analysis

Adobe Systems displayed gorgeous results for the quarter ended on August 30, providing $4.65 in the profit line vs consensus estimates of $4.53 (+3.8% QoQ, +13.7% YoY) on $5.41 bln of total sales vs analyst pool numbers at $5.37 bln (+1.88% QoQ, +10.6% YoY). However, the world's most famous supplier of software features for visual and video artists, including Acrobat Reader and Premiere Pro, lost nearly 9.25% of its market caps at the very first moment after the publication in the extended trading on September 12.

Its earnings report's only "crime" was to issue next quarter's guidance for a revenue range between $5.50 and 5.55 bln, vs the Wall Street consensus of $5.6 billion. The company CEOs' projections for a quarterly profit are lying between $4.63 and $4.68 per share, compared with analyst estimates of $4.67 per share. This actually came very close to the expectations of the market community. Falling slightly short of the audience's sweet dreams, already spoiled by excellent performance of so many tech firms, Adobe stock has been immediately and undeservedly marked down from above $585 (the levels that perfectly hit my three-month old price goals) to nearly $530.

Adobe shares' temporary return to a re-test of its former solid footing in the vicinity of mid-June and early August support lines, from $500 to $530, is nothing other than a long-awaited chance for dip buyers. By offering bigger discounts, Adobe may attract even more shareholders of its business, who previously were waiting for their proper time to invest.

Some investing houses were reportedly confused by strengthening competition from Midjourney and other startups amid potential threats of narrowing demand at the expanding market of various AI-integrated tools. Yet, no one found any convincing evidence of Adobe company's troubles because of the above-stated (or some other) reasons. Tech spending for promotion of goods and services, backed by neural networks, is hitting its record high levels, with Adobe being in the forefront.

The efficiency of money flow's conversion into net income has become so clear in Adobe's case. When the central bankers' interest rates would go down step-by-step, softer monetary conditions would additionally help to reduce borrowing costs which may be important for each and any tech business. Meanwhile, Adobe announced its new generative AI-powered video creation tool, called Firefly Video Model, in a limited series for creative professionals at the beginning. A sign of breakthrough technologies are on the way to supplement the set of Adobe's smart offerings.

Tron (TRX) has gained 1.0% this week, reaching $0.1542, while underperforming compared to Bitcoin (BTC), which has surged 6.9% to $58,000. However, the broader trend paints a different picture. Since the beginning of August, BTC has fallen by 10.7%, whereas TRX has surged 19.8%, making it one of the strongest performers in the crypto market during this period.

TRX’s price movement is significant as it recently broke above the resistance of an ascending channel that has been in place since November 14, 2022. After retesting this resistance level at $0.1500 from the upside, TRX is now aiming for its next upside target of $0.1700. The technical setup suggests that TRX could maintain this upward momentum, with a solid foundation for further gains in the coming weeks.

One of my favourite stocks and the world's 12th most valuable company, now sitting around $750 billion, suddenly lost 10.35% of its market cap last Friday following its own slightly-less-than-hoped-for revenue forecast. Yet, the minor slip-up ($14 billion instead of $14.04 billion) in the firm's internal, and mostly very positive, outlook for the current quarter came on the back of solid earnings for the previous three months. Both profit (+17.6% YoY and +11.3% QoQ) and sales (+47% YoY and +4.6% QoQ) clearly continued the glorious uptrend in major components of a series of Broadcom's corporate reports for a year and a half. One more side of a positive message has been viewed in raising the company's forecast for annual AI (artificial intelligence) revenue to $12 billion vs earlier expectations of $11 billion. Therefore, from the very beginning, the latest price drop seemed to be a rather absurd action. Indeed, it was short-lived and only provided a rarely good entry point for smart investors. As a result of "panic buying", shares of Broadcom fully closed the gap. The recovery process culminated during the last regular session on September 11, when the stock rebounded by 6.79% to the joy of all stubborn bulls like me. The global supplier of a wide range of semiconductor and infrastructure software products for data centers has multibillion-dollar contracts with a sweet couple of most capitalised companies of Wall Street, which are Microsoft and Apple, of course. This circumstance alone would be enough to hold a significant amount of Broadcom shares in my personal portfolio, without being spooked by any stormy but temporary pullbacks from time to time. Now we may anticipate a more rapid price growth towards an all-time highest point above $185 (previously detected on June 18) or even higher towards $200, when taking into account the S&P 500's unordinary ride yesterday to form a reversal daily candle. It covered a 1.5% initial slide in the two very first hours after the opening bell, with a wide range of intraday price changes between 5,400 and 5,550.

Oracle just attacked all of its rivals with another straight thrust forward. As we noted for the first time as early as March, bulls were not going to have a rest until properly testing the range between $145 and $150, with our next target for the future being raised to $170 three months later. Now this steadfast pillar of the cloud-based upside momentum is hitting $160 to come atop the hill soon. A regular member of the top-3 winners’ global club in the software product segment gained 11.44% on September 10 after confirming it still enjoys success in partnership with other grandees. In particular, it ultimately signed an inked agreement with Amazon Web Services (AWS). This move would allow crowds of customers to access Oracle's Autonomous Database and Exadata Database services via AWS, with the general availability of Oracle's Database@Google Cloud. The new option will contribute to other great connection opportunities through Microsoft Azure and Google Cloud. And this would surely bring more revenue sources, even though Oracle's cloud services sales already jumped by 21% to $5.6 billion in the recent financial quarter. The total money collections from all blockbuster products amounted to $13.31 billion, for the quarter ended August 31, only slightly higher compared to $13.23 billion in consensus estimates. However, the firm's remaining, and therefore nearly guaranteed, performance obligations of booked revenue, rose by 53% to reach as much as $99 billion for the reported period. The company took its profit of $1.39 per share, above estimates of $1.32.

Oracle CEOs also shared their inner expectations of the further pace of revenue growth within a range from 8% to 10%, better than the midpoint of analyst pool's projections at 8.72%. Oracle's database business clearly benefits from collaborations with the giants who are already cloud monsters themselves, performing its part of a cheaper and safer provider in a dynamic role-playing game with Amazon and Microsoft platforms, even though the latter is closely integrated with ChatGPT creators. Oracle's cloud features and supercomputers' high capacities are also demanded by AI gods from NVIDIA. Besides, many global organizations and services for the global investment community, like MSCI and New Zealand's Fonterra dairy exporter, prefer to use Oracle World's Database@Azure to accelerate their cloud migrations.

Based on all those relationships, we are ready to raise our price goals for Oracle shares after the current speculative target at $170 will be hit.