Out With The Old

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What's going on?

Oracle is helping businesses clean house and make a fresh start: the US software company reported stronger-than-expected quarterly earnings late last week.

What does this mean?

Its no secret that the cloud computing industry is big and getting bigger, but Oracle hasnt benefited from its pandemic-driven growth this year as much as, say, Amazon and Microsoft have. The companys would-be customers, after all, reprioritized their spending plans back in the spring and ultimately decided not to splash out on upgrading their software. And Oracle in name and nature found itself warning that thered be tough times ahead.


Now, though, theres light at the end of the tunnel, which might be why Oracles services were at the top of its customers shopping lists last quarter. The software giant delivered higher sales and profit than analysts predicted after having previously lowered those expectations, and it increased its earnings forecast for this quarter too.

Why should I care?

For markets: Disposable products.


Oracles shares initially climbed 2% on Friday, taking this years rise to 14%. But while thats roughly the same as the overall US stock market, its miles behind cloud rivals Amazon and Microsoft, whose shares are up 67% and 33% respectively. And Oracle may never catch up: its admitted that its customers dont see its services as an essential expense in a pandemic, which could mean theyre the first to get the chop if things go south again.



Zooming out: A buffering rivalry.


One cloud service that has proved itself essential during the pandemic is video-streaming. Just look at Disney, which announced last week that Netflix-rival Disney+ now has 87 million subscribers, and could have as many as 260 million by 2024 (tweet this). That along with new content announcements seemed to press all the right buttons with investors, and they sent its stock to an all-time high.

Originally posted as part of the Finimize daily email.

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