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Jan. 22, 2021, 9:21 a.m. EST

Microsoft stock is a buy while Oracle is a sell, says Goldman Sachs

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By Emily Bary

Goldman Sachs analyst Kash Rangan initiated coverage on a basket of software names late Thursday, assigning buy ratings to shares of Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +1.48% , Workday Inc. /zigman2/quotes/201157610/composite WDAY -2.39% , Adobe Systems Inc. /zigman2/quotes/200389143/composite ADBE +0.11% , ServiceNow Inc. /zigman2/quotes/202729495/composite NOW +0.88% , Salesforce.com Inc. /zigman2/quotes/200515854/composite CRM -6.31% , and Splunk Inc. /zigman2/quotes/203060494/composite SPLK -1.43% . He's less upbeat about the prospects for Autodesk Inc. /zigman2/quotes/209828392/composite ADSK -2.83% and Oracle Corp. /zigman2/quotes/202180826/composite ORCL -1.21% as he assigned sell ratings to both names. Rangan's buy-rated stocks "lean more toward reasonably valued high quality growth franchises," he wrote. Companies like Microsoft, Salesforce, Workday, and Splunk look poised to benefit from a potential shift in software spending priorities toward the second half of the year, he argued. While corporate IT departments have been spending on "defensive" categories like video conferencing and remote applications, they could soon shift to more "offensive" areas like the public cloud, human-capital management, and financial tools, Rangan wrote. As for the sell-rated names, Rangan is worried about "secular pressure" for Oracle's middleware business and the health of Autodesk's customer base, particularly in terms of commercial construction companies after the pandemic ends.

/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 232.38
+3.39 +1.48%
Volume: 37.82M
Feb. 26, 2021 4:00p
P/E Ratio
34.61
Dividend Yield
0.96%
Market Cap
$1752.66 billion
Rev. per Employee
$877,393
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/zigman2/quotes/201157610/composite
US : U.S.: Nasdaq
$ 245.18
-6.01 -2.39%
Volume: 4.43M
Feb. 26, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$58.84 billion
Rev. per Employee
N/A
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/zigman2/quotes/200389143/composite
US : U.S.: Nasdaq
$ 459.67
+0.51 +0.11%
Volume: 3.15M
Feb. 26, 2021 4:00p
P/E Ratio
42.39
Dividend Yield
N/A
Market Cap
$220.04 billion
Rev. per Employee
$571,371
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/zigman2/quotes/202729495/composite
US : U.S.: NYSE
$ 533.46
+4.67 +0.88%
Volume: 1.80M
Feb. 26, 2021 4:00p
P/E Ratio
904.94
Dividend Yield
N/A
Market Cap
$104.61 billion
Rev. per Employee
$345,104
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/zigman2/quotes/200515854/composite
US : U.S.: NYSE
$ 216.50
-14.58 -6.31%
Volume: 20.37M
Feb. 26, 2021 4:00p
P/E Ratio
49.35
Dividend Yield
N/A
Market Cap
$198.69 billion
Rev. per Employee
N/A
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/zigman2/quotes/203060494/composite
US : U.S.: Nasdaq
$ 143.01
-2.07 -1.43%
Volume: 3.63M
Feb. 26, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$23.13 billion
Rev. per Employee
$406,711
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/zigman2/quotes/209828392/composite
US : U.S.: Nasdaq
$ 276.00
-8.03 -2.83%
Volume: 2.53M
Feb. 26, 2021 4:00p
P/E Ratio
50.76
Dividend Yield
N/A
Market Cap
$60.69 billion
Rev. per Employee
N/A
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/zigman2/quotes/202180826/composite
US : U.S.: NYSE
$ 64.51
-0.79 -1.21%
Volume: 20.51M
Feb. 26, 2021 4:02p
P/E Ratio
19.56
Dividend Yield
1.49%
Market Cap
$189.92 billion
Rev. per Employee
$289,393
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