The following is the summary from my blog: http://zenanalyst.com/2018/06/24/weekly-review-6-22-2018/
The week began with 2 quiet trading days, which I took advantage of by reading general tech news (and learning how to sous vide but that’s for another blog). There were many interesting tech articles out last weekend and this week, especially in AI, which remains one of the hottest topic among tech investors. See my daily notes for links.
Then on Tuesday, after the close, ORCL reported decent earnings but issued weak next-quarter guidance and analysts raised questions on the health of its cloud business as the company decided not to disclose cloud revenues. ORCL traded down 7.5% on Wednesday. After that, RHT reported on Thursday after the close, which really set the tech market on fire. While most head-line metrics looked OK, RHT posted weaker-than-expected billings (+12% y/y vs. +15% y/y) and management lowered its FY guidance due to FX headwinds. In addition, management disclosed that the contract renewal pool is down y/y, which implies a headwind for near-term billings. The stock fell in the mid-teens on Friday.
The two weak tech earnings came at a time of increasing concern around tech valuation, especially software / SaaS names. For example, there were multiple valuation-drive downgrades on Thursday, including CHGG and ELLI. So in conclusion, it looks to me that we are at the start of a tech correction that may last for a 5 trading days or more. Of course, no one knows exactly what will happens, which is why tech investors have their eyes glued on the event / earnings calendar as well as keeping an eye on the health of the IPO market. By my count, there are 12 IPOs scheduled for this week.
Submitted June 25, 2018 at 10:56AM by Keeppgoingg https://ift.tt/2K8WuU3
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