Oracle (NASDAQ: ORCL) and Intel (NASDAQ: INTC) Are In A Sweet Spot - Fred Dunsel (06/12/12)


Oracle Corporation (NASDAQ:ORCL) continued its upward momentum to close at $27.16 last Friday, marking a 4.5% weekly gain. Oracle, which has been steadily rising again after bottoming out at $25.38 in mid-May, is currently up 5.3% for the year. Last week’s gain was primarily due to Oracle’s announcement that it would, as part of its buying spree of web-based software, acquire text-mining and analytics software maker Collective Intellect. (Collective Intellect’s cloud-based software, whose clientele include Hasbro Inc., Nestle S.A.’s Nestle Purina PetCare Co. and PepsiCo Inc., allow companies to monitor and respond to consumers’ conversations on social media platforms like Facebook and Twitter.)

As more and more companies turn to cloud computing, Oracle has been busy positioning itself to take a dominant share of this increasing pie. Its latest acquisition comes shortly after its purchase of cloud-based customer service company RightNow Technologies Inc. (for $1.43 billion) and human resources software maker Taleo Corp. (for $1.9 billion). It has also announced plans to acquire Vitrue (a cloud-based social marketing platform) and ClearTrial LLC (a provider of cloud-based software to pharmaceutical companies).

Meanwhile, another tech giant Intel (NASDAQ:INTC) also enjoyed a weekly gain of 5% to close at $26.41 last Friday. Intel, which has been falling from its peak of $29.18 in early May, only managed to arrest the slide last week. The world’s largest chipmaker, which is currently up 7.6% for the year, has been working on a slimmed down cable TV service that uses a set-top box with Intel technology to distinguish viewers so as to allow target advertising. If successful, this would allow the company’s chips to feature in more living room devices. With its set-top box’s interactive features, it would be highly attractive to advertisers, as well as help to offset reduced revenue from licensing fees for network owners.

Analysts are generally optimistic about Intel, which is widely acknowledged to have strong market fundamentals. Last week, Maxim Group, while cutting its target price from $33 to $29, maintained its “buy” rating on the stock. Morgan Stanley has an “underweight” rating and a $26 price target, while Sterne Agee has a “neutral” rating and $26 price target.

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