Cloud-Software Stocks Tumble From Highs With Salesforce on Deck
Comment of the Day

March 04 2019

Commentary by Eoin Treacy

Cloud-Software Stocks Tumble From Highs With Salesforce on Deck

This article by Jeran Wittenstein for Bloomberg may be of interest to subscribers. Here it is in full:

The week got off to a rough start for cloud-software companies as some of the highest-profile stocks tumbled from records. Inc. fell as much as 5.5 percent on Monday after ending last week at a record $126 billion market valuation. The software maker reports fiscal fourth-quarter earnings this afternoon. Twilio Inc., Splunk Inc. and Zendesk Inc. tumbled more than 7 percent, while ServiceNow Inc. and Workday Inc. both fell more than 5 percent. Atlassian Corp., which also closed at a record Friday, slid as much as 10 percent.

Cloud-software stocks have been among the best performing groups in the post-Christmas rally as investors in search of revenue growth bet that businesses will continue to spend on software services. The S&P 500 software and services group has outperformed the broader index since Dec. 2

Eoin Treacy's view

Cloud computing, and the savings companies get by outsourcing to remote servers rather than trying to keep their in-house kit up to speed, has been one of the primary drivers of the expansion in technology shares over the last few years. Software as a service is a complimentary theme and has allowed companies to offer all manner of intelligence and analytics on customer and employee action from the data collected from cloud servers.

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