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

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.

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Add to watchlist MSFT

Microsoft Corp.

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

/zigman2/quotes/201157610/composite

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Workday Inc. Cl A

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

/zigman2/quotes/200389143/composite

Add to watchlist ADBE

Adobe Inc.

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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ServiceNow Inc.

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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Salesforce.com Inc.

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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Add to watchlist SPLK

Splunk Inc.

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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Autodesk Inc.

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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Oracle Corp.

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