Our topics for today are two American companies — Salesforce and Western Digital. Yes, that's correct: they have an almost 30 year's difference in experience take two bordering yet different niches: one develops corporate software, the other one makes computer electronics. Anyway, both attracted attention of investors this week. Let's find out how they managed to.

Salesforce: record quarterly revenue and improved forecast for 2022

On Wednesday, August 25th, a popular developer of corporate software and cloud services Salesforce reported their statistics for Q2, financial 2022. In short, director-general Marc Benioff called the last three months a phenomenon.

The revenue of Slack that finally merged with Salesforce this July, grew by 39% to $530 million. According to CNBC, the company had forecast $30 million less. Moreover, on the list of the clients of the Slack-First Customer 360 platform are now such giants as IBM and Sonos.

Such impressive revenue in Q2, financial 2022 let the management revise the forecasts for the next 6 months. Revenue at the end of the year is expected to reach $26.2-26.3 billion and return in stock — $4.36-4.38. Both forecasts exceed the average Wall-Street expectations, which are $26.01 billion and $3.82, respectively.

On August 26th, after the publication, the stock price of Salesforce (NYSE: CRM) grew by 2.66%, reaching $267.79. And since the beginning of the year, the stock price has grown by 20%.

Important report details

  • Revenue — $6.34 billion, +23%, forecast — $6.24 billion.
  • Return on stock — $0.56, -80%, forecast — $0.92.
  • Net profit — $0.53 billion, -79%.

Those who got worried about a decline in the quarterly profit should recall that a year ago Salesforce got a tax relief sized $2 billion because of certain changes in the global corporate structure.

Tech analysis of Salesforce shares by Maksim Artyomov

After the positive news was reported, Salesforce shares opened with a gap at the last trading session. Next thing, as it often happens, they started falling.

Now I suppose that the price will fall to $262, test the level, and resume the uptrend. The persistence of the ascending dynamics is supported by the 200-days Moving Average that is still growing, aiming at $284.

Tech analysis of Salesforce shares for 27.08.2021

WSJ: Western Digital might merge with Kioxia

On August 25th, the Wall Street Journal published an article claiming that an American developer of computer accessory Western Digital and Japanese maker of microchips and data storage devices Kioxia were talking actively about a merger.

According to the WSJ, the merger might happen in mid-September already, reaching about $20 billion. Analysts note that this joint enterprise will become one of the largest players in the market of memory card development and production. The new structure might be managed by the director-general of Western Digital David Goeckeler.

It is clear that such a large trade must be approved by the Japanese government. Kioxia is quite an important company for the country's economy, especially that in the future it might be managed by a foreigner.

At the side of Washington, there must be no diffuculties as the merger fully complies with the US plans to create its own mighty and efficient infrastructure for developing and producing microchips. Never depend on China, so to say.

What's going on with Western Digital quotations?

The info published by the WSJ immediately influenced the stock price of Western Digital (NASDAQ: WDC). On the same day, August 25th, the trading session closed with growth by 7.8% to $65.5.

However, there are no official comments yet, and Kioxia representatives still voice plans of an IPO. For investors, this is misleading, and reflects in the quotations.

On the next day already, the stocks of the US company dropped by 4.47% to $62.57.

Tech analysis of Western Digital shares by Maksim Artyomov

A possible merger of Western Digital with Kioxia didn't make investors stably positive: the last trading session closed with a significant decline. The stock price is now at the 200-days Moving Average, which makes the situation more dubious.

Until the company closes the trade with Kioxia, I suppose that the shares will keep falling. The first goal is the support level of $59.5. Until the results of the merger are announced, the quotations might go on declining in a correctional wave. The next goal is the support level of $55.

Tech analysis of Western Digital shares for 27.08.2021

Summing up

On Wednesday, the American IT sector demonstrated curious activity. Salesforce reported a record quarterly revenue and improved the forecast for the financial 2022. The shares of the corporation demonstrated moderate growth of 2.66% to $267.79.

And Western Digital got mentioned by the Wall Street Journal in terms of a possible merger with Kioxia. The information about such a major trade with delicious details in the best market traditions did its job: the quotations of the US company leaped up by 7.8% to $65.5.

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He is the guru of searching for and demonstrating hidden opportunities and insights of the market. He writes about everything that might be of interest to the investor: stocks, currencies, indices, and various business spheres. Has been “in” since 2019.