In a paradigm shift, businesses are increasingly shifting from owning data centres to cloud computing, which is creating the basis for a new bull run.
The combined revenues of Alphabet, Amazon and Microsoft have totaled to more than $100 billion in quarter that ended in September which makes it nearly 2% of the United States’ national output.
If we were to go by premarket gains, these tech giants could pile up another $75 billion to their combined market value which could be the basis for another round of bull run when the stock market opens on Friday.
To boot, the revenues of these tech giants have beaten analysts’ expectations for this quarter with the jump in revenues riding on the growing clamor for more cloud computing as businesses shift their operations away from owning data centers to cloud computing.
“Obviously we are headed for a strong opening due to the smashing results from the tech heavyweights,” said Peter Cardillo, chief market economist at First Standard Financial in New York. “I expect markets to close the week on new record highs and a good portion of that should be attributed to the results that came from the tech companies.”
As a result, Wall Street analysts have had to scramble to raise their price targets on these stocks.
Brokerage firm, Credit Suisse raised its price target on Amazon.com Inc to $1,385 from $1,350 thus giving room for the stock to climb another 42% in the next 12 months, from Thursday’s closing.
Incidentally, Credit Suisse has also been very bullish on Microsoft Corp and on Intel Corp.
Deutsche Bank stated it was very bullish on Alphabet, saying the company can add another 24% to its share price in the next twelve months.
While the market has got used to record breaking results from Alphabet Inc and Amazon.com Inc, in a development that underscores Satya Nadella’s brilliant turnaround strategy, Microsoft Corp’s revenues rose the most in percentage terms in relation to its past three years.
Intel Corp, which had been struggling with tepid growth, reported a a higher margin in its data center business by 7%, slightly beating analysts’ expectations.