Massive Cloud Growth Has Top Analyst Bullish on Large-Cap Tech


This top old-school technology stock has posted all-time highs this year and has a massive $121.79 billion sitting on the balance sheet. Microsoft Inc. (NASDAQ: MSFT) continues to find an increasing amount of support from portfolio managers, who have added the software giant to their holdings at an increasingly faster pace all of this year and last.

Numerous Wall Street analysts feel that Microsoft has become a clear number two in the public or hyper-scale cloud infrastructure market with Azure, which is the company’s cloud computing platform offering. Some have flagged Azure as a solid rival to Amazon’s AWS service. Analysts also maintain that Microsoft is discounting Azure for large enterprises, such that Azure may be cheaper than AWS for larger users. The cloud was big in the recent earnings report, which was outstanding.

The company has been somewhat quieter on plans for its huge trove of overseas funds, but CEO Satya Nadella surely has big plans for any repatriated money, be it pay off debt, buy back shares, hire employees or spend on research and development.

Shareholders receive a 1.81% dividend. Merrill Lynch recently raised its price target to $106 from $98. The consensus price objective is $104.39. The stock closed Monday at $92.89 a share.


This top software stock has had a solid run, but a poor quarter hit shares Tuesday morning. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide.

The company licenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. Its Oracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

The company posted earnings Monday after the close that prompted some Wall Street firms, including Merrill Lynch, to cut ratings on the stock. The company has always had the tendency to report soft quarters over the years, and the dip in the shares may offer a solid entry place to buy shares.

Shareholders receive a 1.45% dividend. Merrill Lynch lowered its price target $57 from $62. The consensus price target is $55.83. The stock closed Monday at $51.95, but shares traded at $47.60 in Tuesday’s premarket.


This may still be one of the best stocks to own, and it has been on a tear this year. VMware Inc. (NYSE: VMW) provides virtualization infrastructure solutions in the United States and internationally. Its virtualization infrastructure solutions include a suite of products designed to deliver a software-defined data center run on industry-standard desktop computers and servers, and support a range of operating system and application environments, as well as networking and storage infrastructures. Its solutions enable organizations to aggregate multiple servers, storage infrastructure and networks together into shared pools of capacity.

This is one company that may be poised to benefit big-time in 2018 as corporate budgets start to loosen up and spending increases. The passing of the tax reform bill also could kick-start that process. In addition, recent surveys suggest that expectations for budget growth at major corporations requiring VMware’s products are at a nine-year high.

VMware is uniquely positioned to benefit from budget growth given its global installed base, especially related to larger enterprise license agreements, as well as the share of wallet virtualization it has within most IT budgets.

The Merrill Lynch price target is $161. The consensus target is $138.47, and shares closed Monday at $125.59.

Six top companies that should continue to benefit as the massive public cloud growth continues almost unabated. While not suitable for all accounts, those looking for growth now, and in the years to come, would do well to own them for technology exposure.

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