The software industry remains viable for stock buyers, but they should focus on apps, rather than infrastructure, where many companies face the threat of being “Amazoned” out of market share, a Jefferies analyst said in a look at the sector.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="And in light of macroeconomic trends, stock pickers should probably focus on the large cap companies, the&nbsp;analyst said, highlighting top industry pick Microsoft Corporation (NASDAQ: MSFT).” data-reactid=”19″>And in light of macroeconomic trends, stock pickers should probably focus on the large cap companies, the analyst said, highlighting top industry pick Microsoft Corporation (NASDAQ: MSFT).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Analyst” data-reactid=”20″>The Analyst

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jefferies analyst Brent Thill upgraded Microsoft from Underperform to Buy and raised the price target from $93 to $160.” data-reactid=”21″>Jefferies analyst Brent Thill upgraded Microsoft from Underperform to Buy and raised the price target from $93 to $160.

Thill downgraded three stocks:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Oracle Corporation (NYSE: ORCL) from Buy to Hold, lowering the price target from $66 to $60;” data-reactid=”23″>Oracle Corporation (NYSE: ORCL) from Buy to Hold, lowering the price target from $66 to $60;

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Carbonite Inc. (NASDAQ: CARB) from Buy to Hold, lowering the target price from $29 to $17;” data-reactid=”24″>Carbonite Inc. (NASDAQ: CARB) from Buy to Hold, lowering the target price from $29 to $17;

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Check Point Software Technologies Ltd. (NASDAQ: CHKP) from Buy to Hold with a price target drop from $140 to $115.” data-reactid=”25″>Check Point Software Technologies Ltd. (NASDAQ: CHKP) from Buy to Hold with a price target drop from $140 to $115.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Thesis” data-reactid=”26″>The Thesis

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jefferies remains positive on the software industry but is looking to be more defensive considering valuation and macroeconomic concerns. And considering that macroeconomic backdrop, Jefferies’ top picks are all large-cap companies: Adobe Inc (NASDAQ: ADBE), salesforce.com, inc. (NYSE: CRM) and Intuit Inc. (NASDAQ: INTU), in addition to Microsoft.” data-reactid=”27″>Jefferies remains positive on the software industry but is looking to be more defensive considering valuation and macroeconomic concerns. And considering that macroeconomic backdrop, Jefferies’ top picks are all large-cap companies: Adobe Inc (NASDAQ: ADBE), salesforce.com, inc. (NYSE: CRM) and Intuit Inc. (NASDAQ: INTU), in addition to Microsoft.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Thill said he favors apps, over infrastructure business, given a perceived threat from Amazon.com Inc. (NASDAQ: AMZN), whose Amazon Web Services threatens everyone else in the infrastructure space. Applications, unlike infrastructure, can’t be “Amazoned out,” said Thill.” data-reactid=”28″>Thill said he favors apps, over infrastructure business, given a perceived threat from Amazon.com Inc. (NASDAQ: AMZN), whose Amazon Web Services threatens everyone else in the infrastructure space. Applications, unlike infrastructure, can’t be “Amazoned out,” said Thill.

“We believe the best way to play the software Industry is to focus on apps and on large-cap names with good growth profiles and valuation on their side,” Thill wrote in a note. “We believe the best way to play infrastructure is through AMZN.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jefferies thinks the high multiples in recent IPOs, including those for Slack Technologies Inc (NYSE: WORK), Zoom Video Communications Inc (NASDAQ: ZM) and Crowdstrike Holdings Inc (NASDAQ: CRWD) are unsustainable.” data-reactid=”30″>Jefferies thinks the high multiples in recent IPOs, including those for Slack Technologies Inc (NYSE: WORK), Zoom Video Communications Inc (NASDAQ: ZM) and Crowdstrike Holdings Inc (NASDAQ: CRWD) are unsustainable.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Price Action” data-reactid=”31″>Price Action

Several stocks in the sector were heading down on Tuesday, with Carbonite among the big losers, down 5.9% to $14.34. Oracle was off 1.44% at $54, Check Point Software was down 1.42% to $109.33.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Related Link:” data-reactid=”33″>Related Link:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Morgan Stanley Turns Bullish On Adobe, Highlights ‘Durable’ 20% EPS Growth” data-reactid=”34″>Morgan Stanley Turns Bullish On Adobe, Highlights ‘Durable’ 20% EPS Growth

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="JEDI Masters: Amazon, Microsoft Battle To Build Pentagon’s ‘War Cloud’” data-reactid=”35″>JEDI Masters: Amazon, Microsoft Battle To Build Pentagon’s ‘War Cloud’

Latest Ratings for MSFT

Date Firm Action From To
Oct 2019 Upgrades Hold Buy
Jul 2019 Maintains Outperform
Jul 2019 Maintains Neutral

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="View More Analyst Ratings for MSFT
View the Latest Analyst Ratings” data-reactid=”39″>View More Analyst Ratings for MSFT
View the Latest Analyst Ratings

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="See more from Benzinga” data-reactid=”40″>See more from Benzinga

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.” data-reactid=”44″>© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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