Goldman analysts like Microsoft for its strong cloud offering, but are bearish on Oracle partly based by a survey showing CIOs aren’t so hot on the company.
Microsoft recently traded at $229.68, up 2.09%, and Goldman has a $285 price target for it. Oracle recently traded at $60.55, down 1.08%. That nearly matches Goldman’s price target of $60.
Regarding Microsoft, Goldman analysts wrote in a commentary that it “stands out very uniquely in the technology world given its strong presence across all layers of the cloud stack including applications platforms and infrastructure.”
They added that “our investment thesis is that Microsoft is well positioned to double its $60 billion-plus commercial cloud business (Azure, Office 365, Dynamics, and LinkedIn Commercial) into a $120 billion to $140 billion business longer term. We believe that Microsoft’s installed base of on-premise Windows servers alone represents $80 billion to $90 billion in potential Azure business.”
As for Oracle, “when we asked CIOs which vendors will gain or lose share in DX [digital experience] budgets, amongst all vendors, ORCL did not perform well,” Goldman analysts said. Oracle registered “net strength of negative 39%, defined as the percentage gaining share less the percentage losing share.”
Further, “Oracle’s focus for several years now has been on organic development,” the analysts said. “The company has not made major acquisitions for several years. The net result of this strategy has been a steady deceleration in revenue growth from 4% in FY14-15 to 0.3% in FY20.”