Palo Alto Networks shares fall as it faces increasing competition from Microsoft, while DraftKings stock rises on an upgrade from Bank of America analysts.
Video Transcript
- All right, let's take a look at some of the big movers of the day. First up, Palo Alto shares under pressure in today's trading session amid new competition from Microsoft. The tech giant is expanding in cybersecurity after introducing products under its, quote, "secure service edge umbrella."
And Akiko, when we take into account some of the nervousness that we are seeing from the reaction in shares today, I think analysts, investors are trying to figure out what exactly Microsoft's push into this space, what it's going to do for some of the leaders who have historically been able to really find and make their own footprint within cybersecurity.
- Yeah, and we're talking about Palo Alto right now. But their competitors, also down today. Cloudflare as well as Zscaler. This is still in the very early phases. There's no pricing details that have been offered from Microsoft. But as we know, Microsoft is a huge enterprise player.
And you could argue, Seana, though, that there's enough to go around, right. I mean, if we're talking security, I mean, that is something that we have heard over and over. Not just from these companies but from analysts as well. That the demand is there.
And this is an area that a lot of companies are investing in. So we'll be watching for any of those additional details coming out of Microsoft to see how it threatens some of those names that we just mentioned.
Well, DraftKings shares rising after the company received a bullish call from an analyst at Bank of America, upgrading the stock from neutral to buy. This is one of those stocks that have seen huge run-up, more than 150%.
And I go back to a conversation we had a few months ago, Seana, where we were talking about the potential for DraftKings to really be on this path of profitability this year. This is something that the company has already mentioned. But what will be those key catalysts?
North Carolina, most recently, becoming the 28th state to legalize sports betting. But you have to wonder how many of these markets are big enough to really lift and drive that revenue for DraftKings?
- Yeah, what exactly that upside potential looks like, at least, in the near term. But this run-up since the start of the year has certainly been amazing. And I think it caught a lot of investors off-guard, a lot of analysts off-guard, and that's why we're seeing this catch up here with so many analysts.
Because bank of America is not the only name on the street here that is getting a little bit more bullish when it comes to DraftKings. I think a lot of the expectations going into these second quarter earnings are a bit low, given the performance that we have seen since the start of the year. We know that DraftKings has been able to gain some market share here from FanDuel, the industry leader. But, I think, really trying to figure out what exactly that potential looks like is something that everyone is having a little bit of difficulty with right now.
- Yeah, I should point out, BMA also upping its price target from $25 a share to $35. So a little more upside than where it's trading at right now.