For the week starting on June 8, technology investors have two software firms to watch closely. After markets close on Thursday and Friday, respectively, Oracle (ORCL) and Adobe (ADBE) will post results.
Concerns that Oracle had a 4.0x debt/equity sent ORCL stock to lows below $150 in February. Fears disappeared with no news.
Markets are fearful that Adobe’s (ADBE) Firefly cannot compete with free AI chatbot, video, and image offerings. Since April, ADBE stock has traded at between $240 - $260. It broke out briefly near $280, only to close at $251.44. Stock markets cannot simultaneously bet that the AI hardware spending will grow, while software stocks rise with it.
Alphabet (GOOG) announced another $80 billion in AI hardware spending. To keep up, Meta Platforms (META) reportedly might now spend between $125 billion and $145 billion this year. This is up from $115 billion and $135 billion.
On Wednesday, Chewy (CHWY), which attracted bears holding an 11.7% short float, will report results. Investors should avoid companies that supply goods for the pet market. In April, it acquired Modern Animal, a veterinary platform. That would add $125 million in annualized revenue. Chewy also said it would increase its stock buyback program by $500 million.
By comparison, Zoetis (ZTS) shares cratered in early May after it reported results. Investors dumped the stock last month when the firm projected revenue growth of 2% to 5% this year.
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