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The Zacks Analyst Blog Highlights: VMware, Applied Materials, Equinix, Shopify and Johnson Controls International

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For Immediate Release

Chicago, IL – February 18, 2020 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: VMware VMW, Applied Materials (AMAT - Free Report) , Equinix EQIX, Shopify SHOP and Johnson Controls International JCI.

Here are highlights from Friday’s Analyst Blog:

Top Research Reports for VMWare, Applied Materials and Equinix

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including VMware, Applied Materials and Equinix. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

VMware’s shares have underperformed the Zacks Software industry over the past year (-5.8% vs. +45.7%). The Zacks analyst believes that VMware is benefiting from robust demand for NSX, VeloCloud and vSAN product lines.

The company’s dominance in software-defined data center (SDDC) and an expanding customer base in cloud, driven by partnerships with the likes of IBM, AWS and Microsoft Azure, are positives. The Pivotal and Carbon Black acquisitions along with the recently launched Tanzu portfolio are expected to drive recurring hybrid cloud subscription and SaaS revenues in the long haul.

Nevertheless, sluggish server shipment is a headwind. Apart from an unfavorable revenue mix, which is expected to hurt license revenues, margins are anticipated to remain under pressure due to heavy spending on hybrid cloud and SaaS portfolio. The Carbon Black acquisition is also expected to hurt operating margin in fiscal 2021. 

Shares of Applied Materials have gained +42.7% in the past six months against the Zacks Semiconductor Equipment - Wafer Fabrication industry's rise of +52.6%. The Zacks analyst believes that strong momentum in conductor etches is benefiting the company’s position in DRAM and NAND.

Applied Materials reported strong fiscal first-quarter results due to an uptick in demand for semiconductor equipment and solid execution. Further, increased customer spending in foundry and logic on the back of rising need for specialty nodes in IoT, communications, automotive and sensor solutions remained a positive.

It remains positive about price elasticity of NAND, which is expected to bolster NAND customer spending. However, market uncertainties continue to persist. Softness in semiconductor and display markets on account of slowdown in memory and display customers’ spending is a concern.

Equinix’s shares have gained +17.3% over the past three months against the Zacks REIT and Equity Trust – Retail industry's fall of -1.5%. The Zacks analyst believes that the company’s better-than-expected fourth-quarter 2019 adjusted funds from operations (AFFO) per share reflect healthy top-line growth.

In January, it completed the buyout of three data centers from Axtel S.A.B. de C.V., making it one of the largest network-neutral data-center operators in Mexico. Amid higher demand from cloud users, it remains committed to expand its International Business Exchange (IBX) platform.

A global footprint and solid interconnected ecosystems have helped the company deliver its 17th year of consecutive quarterly revenue growth, though rising debt burden might affect its operating results as interest expenses flare up. Also, consolidation in the telecommunications industry might mar demand for co-location space, hurting its growth.

Other noteworthy reports we are featuring today include Shopify and Johnson Controls International.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

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