Amdocs Limited DOX revealed on Monday that it will leverage the recently launched Oracle Database@Azure to help customers accelerate their cloud strategy. Launched in September 2023, the Oracle Database@Azure is a new joint offering from Oracle Corporation ORCL and Microsoft Corporation MSFT.
Notably, Oracle partnered with Microsoft last month to deliver Oracle database services running on Oracle Cloud Infrastructure (“OCI”) in Microsoft Azure data centers with Oracle Database@Azure. With this collaboration, Oracle has now co-located a portion of its infrastructure in the Azure cloud.
On Monday, Amdocs stated that the launch of Oracle Database@Azure will now provide telecom service providers with the option to migrate their Amdocs classic applications to Azure or OCI, based on their need or choice. This will authorize the service providers to integrate their Amdocs classic applications with the latest solutions in the Amdocs portfolio.
Amdocs Limited Price and Consensus
Amdocs Limited price-consensus-chart | Amdocs Limited Quote
DOX continues to expand its global client base by signing long-term contracts and collaborating with major telecom industry players worldwide. The company ended the third quarter of fiscal 2023 with a 12-month backlog of $4.14 billion, up $30 million sequentially and $190 million year over year.
Currently, Amdocs’ growth momentum is anticipated to continue due to its initiatives aimed at aiding digital, media, and network and cloud transformation of its clients. Our estimate for Amdocs’ top line indicates a CAGR of 7.2% over the next three fiscal years.
However, the company is highly susceptible to foreign currency exchange rate risks. It expects foreign exchange fluctuations to continue affecting its top-line performance in the near term.
Additionally, Amdocs’ near-term prospects might be hurt by softening IT spending. Rising interest rates and inflationary pressures are hurting consumer spending. Meanwhile, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues.
On its third-quarter fiscal 2023 conference call, the company pointed out that current macroeconomic uncertainty has started weighing on customers’ spending decisions, which is presenting some headwinds to revenue growth.
Amdocs’ shares have underperformed the Zacks Computers – IT Services industry in the year-to-date (YTD) period. The DOX stock has plunged 7.1% YTD against the Computers – IT Services industry’s growth of 17.2%.
Zacks Rank & Stock to Consider
Currently, both Oracle and Microsoft carry a Zacks Rank #3 (Hold), while Amdocs has a Zacks Rank #4 (Sell).
A better-ranked stock from the broader technology sector is NVIDIA Corporation NVDA, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s third-quarter fiscal 2024 earnings has moved north 2 cents to $3.34 per share in the past seven days. The same has increased 7 cents to $10.74 per share for fiscal 2024 in the past seven days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.8%. Shares of NVDA have risen 209.8% YTD.
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