Sentiment growth in technology sector driven by Jabil, while cloud was top theme for June 2020

Jabil had the highest sentiment score growth for June 2020, while cloud technology had the highest earnings transcript mentions during the month, according to GlobalData, a leading data and analytics company.

Sectorial sentiment growth was influenced by Jabil, which saw the most growth at 41% in June 2020 (fiscal Q3 2020 earnings transcript) compared to its previous earnings transcript (fiscal Q2 2020), according to GlobalData’s Filing Analytics Platform. The average sectorial sentiment score was 0.59, with growth at 2% compared to May 2020 (analysis based on earnings transcripts released in June 2020).

Jabil’s strong free cash flow and improving core margins positively influenced its sentiment score. The top themes in Jabil’s Q3 2020 earnings transcript were cloud services and 5G. Progress Software Corp was second in the list for top gainers due to a rise in renewal rates and recurring revenues, while Oracle Corp was the company with the most mentions of the ‘cloud’ theme.

Rinaldo Pereira, Senior Analyst at GlobalData, comments: “COVID-19 caused a boom in cloud services due to a rise in work from home policies. According to GlobalData, the cloud services market is expected to grow at around 19% (CAGR) due to the outbreak. Following this trend, cloud continues to be a major theme in the technology sector.”

Pereira continues: “The devastation caused by the COVID-19 outbreak has put most business ideals and gains into perspective. However, deployment of cloud technologies has helped companies across sectors – as firms such as VMWare are seeing growing customer cloud spends particularly at the enterprise level.”

American Software had the most sentimental decline (37%) in June 2020 (fiscal Q4 2020) compared to its previous fiscal quarter, driven by the decrease in net income. The top keyword that negatively impacted the earnings transcript’s sentiment score was ‘subscription’, as the company witnessed a decline in subscription margins. Evertz Microsystems also faced sentiment score slumps due to declining sales, as projects being put on hold took a toll on the company.

Pereira concludes: “Several tech companies have witnessed declining sentiments due to an inability to keep up profit margins and revenues. Big tech players such as Netflix have seen slowdowns in currently reported quarters due to the slow opening up of economies, despite seeing meteoric growth in Q1 2020. It will be interesting to see how Facebook, Amazon, Apple, Google and Microsoft cope with their upcoming July 2020 earnings sessions.”

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