|Day's range||1.6700 - 2.3800|
With the COVID-19 pandemic making work from home the default for those companies that are able to do so, it's no surprise that we are seeing a massive rise in the usage of video chat tools like Zoom, Google Meet and Teams. Back on March 16, the company reported 900 million meeting minutes in Teams. During those meetings, more users than ever also turned on their video cameras.
The Dow, the S&P 500, and Nasdaq all jumped again through early afternoon trading Thursday, as part of a larger two week-plus market rally. So let's dive into three cloud-focused tech stocks that look like solid longer-term buys...
(Bloomberg) -- One weekend in March, Javier Soltero, a Google vice president, got an email from his team in Europe. Italy’s Minister of Education needed to move the country’s entire school system online, right away, and wanted to know if Google’s software could handle it.Soltero, who leads G Suite, Google’s set of productivity tools, called his technical staff. “Is this even something we can do?” he recalled thinking. Several sleepless days and nights later, millions of Italian kids were learning from home through Google services.As the month wore on, Soltero’s division faced similar surges in country after country. Schools and universities across the globe have rushed online as the coronavirus shut down public life. Many turned to the world’s largest internet company.“We have seen incredible growth,” Soltero said in a recent interview. “It actually mirrors, unfortunately, the ramp up and spread of the disease.”Alphabet Inc.’s Google has jumped ahead of its big technology peers in the education market in recent years by giving away software and aggressively courting teachers. The pandemic is entrenching the tech giant even further. Google Classroom, a free service teachers use to send out assignments and communicate with students, has doubled active users to more than 100 million since the beginning of March. That’s boosting other products. Meet, a videoconferencing app is being used 25 times as much as it was in January, and the broader G Suite for Education offering has 120 million users, up from 90 million a year ago.Google doesn’t charge most schools to use Classroom. The real prize is the millions of young people learning how to use its software. When those students enter the workforce, they’re likely to keep using paid versions, and encourage colleagues to adopt the tools, too.Google Classroom was already popular in the U.S., but demand is now coming from places with few customers before the virus, such as Italy and Indonesia, according to Avni Shah, Google’s vice president for education. “All these places were really lighting up in the last month,” she said.The company’s foothold in schools began around 2014. In the U.S., a new educational standard, called Common Core, was gaining steam and required online assessments. Google flooded schools with Chromebooks, laptops that run on the company’s Chrome operating system. They were cheaper than rival products from Apple Inc. and Microsoft Corp., and came with pre-installed Google apps including Gmail, Docs, Slides and Drive. Last year, Google commanded 60% of the market for education computers in the U.S., according to consultant Futuresource.Chromebooks were among the first in schools to connect to the cloud, making it easier for teachers and students to work and keep in touch from anywhere. That helped spread adoption, according to Mike Fisher, a Futuresource associate director.Google Classroom, similarly, is taking off because it’s relatively simple to use and flexible. It competes with dozens of other learning-management systems including Canvas and Edmodo, which let schools upload and track coursework. Classroom syncs with those systems and integrates with other school apps, which, like Google’s, are now booming. And crucially, Google’s product is free, while most competitors charge money for premium features.Makers of e-learning tools rely on portals like Classroom to get inside schools. Quizlet Inc., maker of software for studying, saw new signups jump as much as 400% in China and Italy as the coronavirus spread, said Chief Executive Officer Matthew Glotzbach. About 150 million of Quizlet’s study sessions last year came from Google Classroom, he noted.Google’s offering is also intuitive. Teachers new to remote learning are usually able to upload assignments quickly and launch video calls with little fuss, according to Fisher. “That solution, for the situation we’re in, is perfect,” he said.As schools around the world started closing over the first two weeks of March, Luke Craig, a teacher at Britannia Village Primary School in east London, saw what was coming. Craig and his colleagues used Google Sites, a web page-building tool, to set up a hub for their school and started practicing running classes through Google Classroom. A few days later, schools across the U.K. shut down.Now, Craig’s first-grade students open their Chromebooks and log into Google accounts for lessons. The Google Sites page lays out the plan for the day, and, depending on the subject, they use a variety of apps made by different companies, including Microsoft. Google Classroom is the central hub, allowing students to submit assignments and teachers to track progress. Another Google product, Jamboard, lets teachers create interactive lessons. Some of the kids, as young as 6 years old, have become so proficient they’re making their own videos detailing their assignments, Craig said.Google has experienced some problems bringing millions of students online so quickly. When schools first jumped on its Meet video-conferencing service, some kids figured out they could boot other participants from a call.“Students were kicking the teachers out and carrying on,” Craig said. Google heard the complaints, and fixed the issue quickly. The company has been rapidly building new features, thanks to hundreds of employees who volunteered to help the education team when the coronavirus started spreading widely, Shah said.Craig also warned that students who don’t have as much support from parents, or access to computers and the internet, could fall behind. “Without the face-to-face contact, it’s likely some kids will slip through the cracks,” he said.Google recently pledged to provide internet connections to as many as 100,000 households in California and distribute 4,000 Chromebooks to kids in need. That’s nowhere near enough resources to fill a growing digital divide in education, and doesn’t help Craig’s students in East London.Read more: U.S. Schools Trying to Teach Online Highlight a Digital DivideIn Italy, Google partnered with telecommunications companies so students can use a regular phone line to at least listen in to video conference calls with their teachers. The company designs its apps to work on cheap smartphones and to be used without a wireless connection, Shah said.There are also privacy concerns with so many more children getting online. In February, New Mexico’s attorney general sued Google, claiming the company was breaking child privacy laws by collecting data on students. When kids merge their school Google accounts with their personal ones, data could be synced and logged by Google for commercial purposes, the lawsuit argued. Google disputed the claims. A spokesperson for the company said it never uses student data to target ads, even after kids graduate and become adults.But it’s unlikely privacy concerns will hobble Google’s success during this crisis. Most school districts are desperate to get any online system up and running, ignoring some standard protocols for vetting services, said Douglas Levin, president of EdTech Strategies, a consulting company. “Those have been thrown out the window for expediency’s sake,” he said.Google may even benefit from the privacy failures of other companies. Zoom Video Communications Inc., maker of a suddenly popular video chat service, is now seeing some schools drop it after internet trolls started interrupting online meetings and broadcasting offensive content to participants.Craig has been spending the hours in between classes helping other schools get online. He’s one of thousands of teachers certified by Google to train others how to use the company’s software. The certification program has been a keystone of Google’s expansion, netting the company a group of people who use its products and encourage others to do the same.When schools finally re-open, the education world will be very different. Tech holdouts who resisted internet-based products like Google Classroom will have been forced to use them and adapt. Many schools without a home-learning system will have one. Students lucky enough to have internet at home will have months of experience learning online.“All those technology-phobic people will be no more. They will not go back to their pencil and paper,” said Melissa Matthews, a technology program specialist for the school district of Palm Beach County in Florida. “I don’t foresee Google Classroom getting any fewer users come August when everyone goes back to school.”(Updates with G Suite for Education number in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Microsoft said that video calls on Teams, which competes with apps such as Slack Technologies Inc and Zoom Video Communications Inc , were up 1,000% in the month of March, but did not give an absolute figure. The company said the proportion of meetings and calls that included video more than doubled to 43% from 21% over the month of March. Jared Spataro, corporate vice president for Microsoft 365 at the company, said Microsoft's data showed video use interspersed throughout the workday.
To stay connected amid the coronavirus-induced lockdown, people across the world are relying heavily on the Internet, which brightens up prospects for cloud players.
American and British cybersecurity officials are warning that state-backed hackers and online criminals are taking advantage of the coronavirus outbreak to further their operations, echoing concerns from digital safety experts. A joint advisory published on Wednesday by the U.S. Cybersecurity and Infrastructure Agency and Britain's National Cyber Security Centre said that while the overall volume of malicious activity does not appear to have changed, hackers of all varieties were leveraging anxiety around the disease outbreak to push people into clicking links and downloading attachments. "Bad actors are using these difficult times to exploit and take advantage of the public and business," Bryan Ware, CISA's assistant director for cybersecurity, said in a statement.
(Bloomberg) -- With millions of people around the world stuck in their home offices to help contain the coronavirus outbreak, companies that specialize in remote-working products are becoming a hot spot.For that reason, Direxion is planning to start a new “work-from-home” exchange-traded fund that tracks industries such as cloud technologies, remote communications and cyber security, according to a filing to the Securities and Exchange Commission. The ETF will trade under the ticker WFH.Thematic funds, which seek to capture trends that are easily explained to retail investors, have struggled in a crowded ETF marketplace. However, Direxion’s remote-work offering is likely to resonate with traders given the recent popularity of those companies, according to CFRA Research’s Todd Rosenbluth.“This ETF combines some popular, well-established thematic strategies focused on cloud computing and cyber security with remote learning and document management that are all the more pressing, given Covid-19 concerns are likely to remain,” said Rosenbluth, CFRA’s director of ETF research.Read more: Cloud Computing Seen as Tech Haven Amid Pandemic UncertaintyCloud-computing companies have been a clear beneficiary of the stay-at-home and social distancing measures to help combat the spread of the virus. Shares of Microsoft Corp. soared last week after the company said its cloud services usage spiked by 775%.Still, some analysts aren’t convinced about the positive trend for the industry. While WFH’s narrative is “compelling,” the valuations of the tracked companies likely reflect the market’s enthusiasm for this theme, according to Morningstar Inc.’s Ben Johnson.“This too shall pass and investors have already bid up the shares of a lot of these stocks,” said Johnson, Morningstar’s co-head of passive strategy research.Other issuers have sought to capitalize on the work-from-home boost. The Wedbush ETFMG Global Cloud Technology ETF, which tracks global small and mid-cap companies involved in cloud infrastructure and technology, began trading this week.Unlike the majority of Direxion’s products, WFH won’t use leverage to amplify returns. The new offering is consistent with Direxion’s focus on broadening its thematic offerings to “buy-and-hold” investors, head of ETF product David Mazza wrote in an email. The firm launched three non-leveraged ETFs in February as part of that strategy.“While leveraged ETFs remain part of their lineup, they have expanded beyond the nice and highly tactical short-term oriented products,” Rosenbluth said.(Adds tout. An earlier version of this story corrected Microsoft’s share price.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
BlackRock and Microsoft Corp. have formed a strategic partnership to host BlackRock’s Aladdin infrastructure on the Microsoft Azure cloud platform, bringing enhanced capabilities to BlackRock and its Aladdin clients, which include many of the world’s most sophisticated institutional investors and wealth managers.
(Bloomberg) -- The coronavirus pandemic has pressured nearly every corner of the global economy, but analysts continue to see sunny days ahead for cloud computing and the ecosystem that surrounds the technology.The sub-sector is seen as a rare bright spot in the current environment, particularly as the outbreak pushes more people to work remotely, contributing to a long-term trend of rising demand. The boost is expected to be broad based, helping software companies, communication firms, and chipmakers that focus on data-center products, which are processors used in cloud computing.“The lasting impact of Covid-19 could actually be a net positive,” wrote Richard Baldry, an analyst at Roth Capital Partners. Cloud-based communication companies “should see increased customer activity, at least once operational bandwidth returns to a somewhat more normal level for prospects.” He listed Five9, Medallia, eGain and LivePerson as names that could see stronger demand and which were trading at valuations he views as attractive.So far this year, the Global X Cloud Computing ETF -- an exchange-traded fund that tracks an index of companies involved in the space -- is down 6.4%. A different ETF, the First Trust Cloud Computing ETF, is down 9.2%. Both have outperformed the S&P 500’s drop of more than 15% over the same period.According to Wedbush, the pandemic has thrown “sales cycles, procurement/IT departments, and budgets into a tornado-like state of chaos,” resulting in unprecedented risks to IT spending. Even in this environment, analyst Daniel Ives wrote, “cloud remains a theme”; he expects $1 trillion to be spent on cloud computing over the coming decade.Ives named Microsoft as “the Rock of Gibraltar cloud stock to own,” but said the trend would also support the cloud-computing businesses of both Amazon and Alphabet.Earlier this week, Bank of America referred to cloud-focused chipmakers as a “shining house in [a] tough neighborhood,” referring to the headwinds facing other areas of the industry. Analyst Vivek Arya expects cloud capex to rise 13% in 2020. While this is down from a prior view of 16% growth -- the lower estimate reflects “the most current Covid-19 headwinds” -- it represents a “robust acceleration” from 2019, when capex grew just 3.5%.The firm listed Broadcom, Nvidia, Advanced Micro Devices, Marvell Technology and Intel among the chipmakers most exposed to this trend. Nvidia has been one of the rare semiconductor gainers this year, and analysts have pointed to its data-center business as a tailwind.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Zacks Analyst Blog Highlights: Teladoc Health, Zoom Video Communications, Microsoft and Alphabet
This week on IBD Live, the Team reviewed the recent bullish momentum in stocks and what to expect as the market attempts to gain strength.