3 Tech Stocks To Watch In October

3 Tech Stocks To Watch In October

These tech companies come with important information about their long-term and potential gains during the coronavirus outbreak.

After an eventful summer dominated by the coronavirus pandemic, these results will reveal how companies progress in these extraordinary times and how their futures are affected. Technology stocks that investors should watch especially in October: International Business Machines (NYSE: IBM), Microsoft (NASDAQ: MSFT) and Arista Networks (NYSE: ANET) should be closely watched.

1. IBM: Cloud systems

  IBM is one of the first technology giants to report third-quarter results. This will give us an early indicator of the performance of the tech industry. But more importantly, investors should look at the company's transition from in-house business to cloud computing. During IBM's on-premise cloud operations, revenue fell from $ 105 billion in 2012 to $ 76 billion in the past 12 months. IBM has accelerated the transition to the cloud. The company bought the cloud systems specialist company Red Hat for $ 34 billion in 2019 and was appointed CEO in April to prompt Arvind Krishna to lead this transition. IBM is approaching an extraordinary point in turnover growth thanks to its various cloud capabilities. Cloud systems with 12-month revenue of $ 23 billion are equal to 30% of the total revenue in 2012. Cloud revenue growth in the last quarter was over 30% compared to this time of last year. If IBM continues to generate massive double-digit revenue growth with its cloud systems business, the stock is just under 10 times the estimated earnings and now looks low cost. Big Blue agency will announce its third-quarter results on October 19.  

2. Microsoft: expectations are that growth will be strong

Investors should keep a close eye on Microsoft's next quarterly earnings, as the cloud business contributes to IBM. Providing the company's cloud infrastructure, Azure has been growing at an extraordinary rate over the past few years. In the last quarter, Azure's revenue increased by 47% compared to the previous year. As cloud computing consumption increases, investors must be confident that Azure will be the revenue growth factor for Microsoft. However, the company trading stocks with futures earnings, 31 times higher than its current value in the long term, must also show strong results with other businesses to justify this challenging valuation. Microsoft is launching new gaming products that will shape its performance in this market over the next few years. In addition to its new cloud gaming service xCloud, the company will launch its next-generation consoles Xbox Series X and Xbox Series S, which have been pre-ordered since September, on November 10. can give. Microsoft is expected to announce its quarterly results between October 20 and October 25.  

3. Arista: Controlled shift from cloud network systems to cybersecurity

Microsoft is one of Arista's biggest customers. So Microsoft's results should be of interest to Arista's shareholders. While Microsoft formed part of the Azure network infrastructure with Arista's hardware and software, Microsoft accounted for 27% and 23% of Arista's total revenue in 2018 and 2019. As a cloud network vendor, the company achieves strong revenue growth by providing innovative solutions to cloud providers. Its revenue has increased from $ 1.1 billion in 2016 to $ 2.3 billion in the past 12 months. However, there have been several challenging quarters due to volatile spending of some of the major customers recently. For example, revenue fell 11% to $ 541 million in Q2. While cloud-based service consumption is accelerating due to the coronavirus pandemic, Arista's support of its core business and revenue from cloud giants predicts that it will remain stable this year. Therefore, the downside changes in the annual revenue outlook from some of these clients should worry investors. It could show that as competition increases, the company portfolio becomes less attractive. It is estimated that Arista will announce its third-quarter results between October 28 and November 1. Arista management will hold an important webinar on October 15 to discuss cybersecurity strategy. Last week, Arista bought Awake Security, which represents a significant long-term growth opportunity that it can seize by leveraging synergies with its network portfolio, and announced its first step into this large and growing market. In any case, the stock is traded at a low-cost and forward price-to-earnings (P / E) ratio of 21, which gives shareholders some added potential, the perspective expanding towards cybersecurity, while the company remains mainly concerned with the cloud networking business. Source: fool.com You might also be interested in:

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