International Business Machines Corp. (NYSE:IBM)’s last quarterly report was not well received by the market, and shares have steadily declined in the ensuing weeks. Revenue declined 3% in International Business Machines Corp. (NYSE:IBM)’s fiscal second quarter, and in all, this was International Business Machines Corp. (NYSE:IBM)’s fifth consecutive quarterly decline in revenue. Profits also fell by 17% year-over-year in the most recent quarter, due to both lower sales and a $1 billion charge for a previously announced workforce restructuring.
And, while Oracle Corporation (NYSE:ORCL)’s fiscal fourth-quarter net profit rose 10% to $3.8 billion, revenue stayed flat, coming in well short of expectations. In all, this quarter marked the second in a row in which Oracle Corporation (NYSE:ORCL) missed forecasts for software sales and subscriptions. Going forward, the picture remains cloudy at best. Management stated that new software sales and subscriptions will rise 0%-8% during the current quarter.
The Foolish takeaway
Whether this is simply a summer slowdown in technology-related spending, a more significant failure of execution and leadership, or a combination of these factors, remains to be seen.
At the same time though, any resumption in modest technology spending will surely benefit these companies, which is the basis for the analyst upgrade on Intel.
As a result, if next year brings the product refresh cycle that the Piper Jaffray analyst expects, all three technology giants stand to benefit, including Intel.
Since technology spending is cyclical by nature, the recent drops in International Business Machines Corp. (NYSE:IBM), Oracle, and Intel seem to present a compelling opportunity for long-term investors. Those who are willing to ride out further bumps in the road are getting these tech stocks at reduced prices. Consequently, today’s prices are likely to be rewarding entry points for patient investors.
The article Will an Analyst Upgrade Cure What Ails This Tech Stock? originally appeared on Fool.com is written by Robert Ciura.
Robert Ciura owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, International Business Machines, and Oracle.
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