Cisco Stumbles With IT Sector
Many IT companies stumbled with a decline in stock price.
Cisco Systems is said to be the largest firm amongst a diverse array of companies that came up with their quarterly results this week. These organizations mostly belong to the Information Technology sector thus benefiting from the trend that has been presented over the Internet, generally referred to as cloud computing. However, Cisco is generally reliant on China and other emerging nations all over the globe with not-so-strong economy.
The stock price of companies that are dealing in data analytics and cloud computing have gone down for the second time on Monday. This was because Tableau Software came up with their weak revenue forecast that eventually disappointed the investors largely.
Analysts have been building up the hype for cloud computing companies along with Big Data for a long, which involves the critical analysis of the increasing amount of data stored on the ecosystems. Thus, investors are now more particular about such stocks.
Cisco stocks did not embrace any change this Monday however, the stock price of other companies went down significantly. In addition to the disappointing report of Tableau, the IT service’s weak revenue forecast on Monday encompassed Cognizant Technology Solutions. The immensely promising reports by SAP SE and Microsoft made the investors more concerned about the future of the health technology sector.
CSCO is likely to show 1.5% decline in terms of revenue for the trimester that ended in January as per Thomas Reuters; however, investors are more worried now since the present trimester can be worse.
The spending of the entire global IT sector has gone down by 6% in FY15 and could not grow more than 1% this annum as per Gartner – a market research firm.
Other companies that were under the limelight include Akamai Technologies whose clients are MTV Networks and Audi. Later on Tuesday, the business is likely to report a 6% increase in its revenues for the fourth quarter, which will be its minimal growth since FY10.
"We have a market that's absolutely in a risk-off mode and given the heightened uncertainty around the name, there's a lot of fear," mentioned Jonathan Schildkraut, an analyst at Evercore, among all other analysts who gave a Buy rating for Akamai’s stocks.
The other companies belonging to the IT sector that will be reporting this week are Fidelity National Information Services, FireEye (cybersecurity company), and Limelight Networks. The stocks of these companies decline by 4-9% recently.