Eq: Tech

(New York)

There has been a lot of hype about cloud computing for the last few years. Growth in the sector has been massive, and Amazon Web Services (Amazon’s cloud business) has become a key indicator for investors. A new report out today shows why now might be a good time to invest more in the sector. The report shows that large enterprises are planning to increase their overall spending on cloud product, and by 2021, the cloud will account for 32% of overall tech budgets versus 30% today. More impressively, spending on the cloud by large enterprises is up 59% since 2018 to $74m annually.


FINSUM: A 2% shift in tech spend into the cloud alone is a good driver of business. It is probably a good medium to long-term bet to take a look at a handful of cloud stocks.  Check out at Global X's CLOU for a good cloud computing ETF.

(Seattle)

For the last week, Microsoft has been in a delicate dance to try to acquire the hugely popular social media app TikTok. President Trump has been adamant that it needs to be bought by US interests or he may ban the app. Last week, Microsoft said it was trying to acquire the company, but then swiftly abandoned the efforts because Trump said he would block the deal. Now, Microsoft says that Satya Nadella and Trump have spoken and gotten on the same page and that the deal is back on. Wedbush thinks the deal could be transformational for Microsoft as it would put them in direct competition with Facebook, Alphabet etc, and give them a huge social media prize while those competitors remain mired in major regulatory scrutiny.


FINSUM: TikTok already has 100 million users in the US. We think if this goes through it could end up being a major boost to Microsoft. Perhaps not unlike Facebook’s acquisition of Instagram.

(New York)

Ever on the search of new ways to think about the markets and innovative methods to predict them, we found new research from UBS which identifies a good new predictive indicator for single stock performance. That indicator is pay revolts. UBS ran an exhaustive study of 1,700 known pay revolts (when shareholders vote against executive compensation packages), and found that such companies were much more likely to suffer share price underperformance following the event. The average one-year underperformance after a pay revolt was 15%.


FINSUM: This is great info in its own right, but what makes it very timely is that Netflix lost a pay vote last year, as did Ameriprise and Xerox.

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