When earnings season comes into full bloom, it gets investors’ juices up as they wait and watch with bated breath for which companies are going to outperform analyst forecasts to propel their stocks higher.
Earnings season typically kicks off the second week of January, April, July and October, with a few early bird reports from some notable tech companies that are leaders in the software sector. There currently are some embedded tea leaves in the software space, namely the pace of information technology (IT) business spending by medium-to-large corporations set to reach the highest levels in five years.
Wall Street analysts carefully track business spending on refreshing and upgrading software that are needed to maintain competitive advantages and reduce long-term costs of running the business. But as the old saying goes, “You’ve got to spend money to make money.” And when the economy is muddling along at a gross domestic product (GDP) growth rate of less than 2.0% of, companies put off spending and will do without until their forward budgets determine the expense for more IT is justified by order backlog.
This economic cycle is no different this time around, with the exception of some major technological advances. The advent of cloud computing has mushroomed into a trillion-dollar global industry and 74% of technology chief financial officers (CFOs) say cloud computing will have the most measurable impact on their business in 2017.
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