The growing demand for advanced technology and data is shaping the outlook for the big data industry. The global big-data market is advancing significantly, driven by large-scale analytics and intelligent automation services investments. As per a recent update by the International Data Corporation (IDC), worldwide spending on big data and business analytics (BDA) solutions is expected to hit $215.7 billion this year, reflecting a 10.1% increase year-over-year. In addition, this spending is expected to grow at a 12.8% CAGR over the next four years.
The United States is expected to be the largest market for big-data companies, with more than $110 billion in BDA spending this year.
Considering the industry’s robust growth prospects, we think industry giants Oracle Corporation (ORCL), International Business Machines Corporation (IBM), VMware, Inc. (VMW), and Teradata Corporation (TDC), which are rated Buy in our proprietary POWR Ratings system, could be solid bets now.
Oracle Corporation (ORCL)
Redwood City, Calif.-based ORCL provides products and services that address enterprise information technology environments worldwide. The company’s businesses include cloud and license, hardware, and services.
On August 12, ORCL announced that Vertex, Inc. (VERX), a strategic partner and trusted global provider of indirect tax technology solutions, had seen a significant increase in customer adoption of Oracle Cloud Infrastructure (OCI). Vertex is continuing its industry leadership with ORCL as a preferred cloud infrastructure partner. Over the past few months, several other companies have collaborated with ORCL regarding its services, demonstrating ORCL’s dominance in the industry.
ORCL’s total revenue increased 8% year-over-year to $11.23 billion in its fiscal fourth quarter, ended May 31. Its operating income stood at $4.54 billion, up 5% from the same period last year. Its net income grew 29% from its year-ago value to $4.03 billion. The company’s non-GAAP EPS increased 29% year-over-year to $1.54.
A $44.09 billion consensus revenue estimate for the next year indicates a 4.3% increase year-over-year. The Street expects the company’s EPS to rise 11.3% from the prior year to $5.12 in the next year. ORCL has an impressive earnings surprise history as well; it beat the consensus EPS estimates in each of the trailing four quarters. Shares of ORCL have gained 61.7% in price over the past year and 38.3% year-to-date.
ORCL has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ORCL also has a B grade for Value, Stability, Sentiment, and Quality. It is ranked #7 of the147 stocks in the Software – Application industry.
Click here to view additional ORCL ratings for Growth and Momentum.
International Business Machines Corporation (IBM)
IBM provides integrated solutions and services worldwide. The Armonk, N.Y.-based company operates through five segments: Cloud & Cognitive Software; Global Business Services; Global Technology Services; Systems; and Global Financing.
On September 8, IBM unveiled its new IBM Power E1080 server, the first in a new family of servers explicitly designed for hybrid cloud environments. Given the accelerated adoption of hybrid cloud infrastructure across the IT space, this launch should be a hit in the market.
On August 25, IBM launched Secure Access Service Edge (SASE) services designed to help accelerate organizations’ adoption of cloud-delivered security at the edge–closer to the users and devices that access corporate resources. This is expected to help organizations protect their priority business drivers with a zero-trust approach and allow IBM to expand its customer base.
By 2030, IBM plans to achieve net-zero greenhouse gas emissions. In February, the company shared its plan to reduce greenhouse emissions, using energy from renewable sources and utilizing technologies such as carbon capture to account for any remaining emissions.
IBM’s total revenues increased 3.4% year-over-year to $18.75 billion in its fiscal second quarter, ended June 30. Its gross profit grew 3.5% from its year-ago value to $9.00 billion. Its non-GAAP income from continuing operations came in at $2.10 billion, reflecting a 7.9% increase year-over-year. The company’s non-GAAP EPS increased 6.9% year-over-year to $2.33.
IBM’s revenues are expected to increase 2% year-over-year to $75.13 billion in the current year. The $10.73 consensus EPS estimate for the current year indicates a 23.8% rise versus the last year. Also, IBM surpassed the consensus EPS estimates in three out of the trailing four quarters. The stock has gained 11.1% in price over the past six months and 10.2% year-to-date.
The company has an overall B rating, translating to Buy in our proprietary POWR Ratings system. The stock also has a B grade for Momentum, Value, and Quality. In addition, IBM is ranked #13 among the 46 stocks in the B-rated Technology – Hardware industry.
Get additional IBM ratings for Growth, Stability, and Sentiment here.
VMware, Inc. (VMW)
VMW provides software in hybrid and multi-cloud, modern applications, networking, security, and digital workspaces in the United States and internationally. In addition, VMware was named a leader in the 2021 Gartner Magic Quadrant for unified endpoint management for the fourth year in a row. VMW is headquartered in Palo Alto, Calif.
On August 3, VMW announced the expansion of its capabilities in SaaS innovations to make it easier for IT to manage Horizon deployments wherever they may be, on-premises or in the cloud. Amid the accelerated adoption of hybrid or multi-cloud architecture with Horizon desktops and apps running on-premises, VMW’s innovative and simplified services should be widely in demand.
On June 9, VMW, along with Vapor IO, announced the building of a Multi-Cloud Services Grid that allows developers and service operators to hyper-compose grid services on-demand. This collaboration aims to simplify and lower the costs of deploying distributed 5G systems and real-time applications. The move should strengthen the company’s position in the 5G realm.
VMW’s total revenues increased 9.1% year-over-year to $3.14 billion in its fiscal second quarter, ended July 30. Its Subscription and SaaS revenue was $776 million, reflecting a 23% increase year-over-year. Its cash and cash equivalents balance grew 22.8% from its year-ago value to $5.92 billion, while its net cash provided by operating activities rose 20.2% year-over-year to $864 million.
Analysts expect VMW’s revenues to increase 8% year-over-year to $13.84 billion in the next year. A $7.46 consensus EPS estimate for the next year indicates a 7.5% rise from the current year. In addition, VMW has a notable earnings surprise history; it topped consensus EPS estimates in three out of the trailing four quarters. Over the past year, the stock has gained 8.4% in price to close yesterday’s trading session at $145.73.
It is no surprise that VMW has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The stock also has an A grade for Value and Quality. Among the 60 stocks in the Software – Business industry, VMW is ranked #9.
To see additional VMW ratings for Growth, Sentiment, Stability, and Momentum, click here.
Teradata Corporation (TDC)
TDC operates as a hybrid cloud analytics software provider. The San Diego, Calif.-based concern’s solutions and services comprise software, hardware, and related business consulting and support services to deliver analytics in its analytical ecosystem.
On June 29, TDC announced its continued innovation and commitment to the cloud with new capabilities for Vantage on Microsoft Azure. In addition, the company is strengthening its position and expanding with its ‘cloud-first’ priority. “We continue to prioritize cloud-first development across the entire company to ensure we are helping our customers seamlessly migrate and modernize their cloud data warehouses to meet their accelerated digital innovation goals,” said Barry Russell, SVP Business Development and GM of Cloud at Teradata.
Also in May, TDC released a set of enhancements for Teradata Vantage on Google Cloud to make it easier for Teradata customers to use the Google Cloud services they prefer in a consumption pricing model. This demonstrates the company’s commitment to providing its customers the choice, integration, and consistency to leverage their modern data platform in the cloud.
For its fiscal second quarter, ended June 30, TDC’s total revenues increased 7% year-over-year to $491 million. Its non-GAAP operating income grew 83% from its year-ago value to $117 million, while its non-GAAP net income improved 219% year-over-year to $83 million over the period. The company’s non-GAAP EPS increased 208.3% year-over-year to $0.74.
The Street’s $1.92 billion revenue estimate for the current year indicates a 4.6% improvement from the last year. In addition, analysts expect the company’s EPS to come in at $1.97 in the current year, indicating a 50.4% rise year-over-year. Also, TDC surpassed the Street’s EPS estimates in each of the trailing four quarters. TDC has gained 147.9% in price year-to-date. The stock gained 153.3% over the past year to close yesterday’s trading session at $55.70.
TDC’s strong fundamentals are reflected in its POWR Ratings. TDC has an overall A rating, which translates to Strong Buy in our proprietary rating system. In addition, TDC has an A grade for Growth and Value, and a B for Quality. Among the three stocks in the A-rated Technology – Storage industry, TDC is ranked #1.
Beyond what we’ve stated above, we have also rated TDC for Momentum, Sentiment, and Stability. Click here to view all TDC ratings.
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ORCL shares were trading at $89.91 per share on Thursday afternoon, up $0.44 (+0.49%). Year-to-date, ORCL has gained 40.64%, versus a 21.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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