Is Wall Street beating up on Microsoft?
Goldman Sachs downgraded the software company on Monday and on Tuesday, Janney Capital Markets followed suit. Both firms brought the technology giant down to 'neutral' from 'buy' and said it's missing an opportunity to move its desktop offerings into mobile gadgets, including tablet computers.
At this point, CEO Steve Ballmer should be replaced because of the series of strategic missteps that he's made, said Janney Capital Markets analyst Saša Zorovi? on Tuesday's "Fast Money Halftime Report."
"It would be better for Microsoft to move on," said Zorovi?.
While Microsoft has done around 25 acquisitions over the past year, Zorovi? thinks it should acquire additional companies in the software area, specifically in cloud computing. Companies like NetSuite , Salesforce.com and Taleo would enable Microsoft to round out their portfolio on the enterprise side for cloud computing, he said.
Watch the video to see the full interview with Zorovi? on Microsoft—it starts at 1:55.
What's the Trade?
"I think there is going to be an uproar about the lack of performance there," said Jon Najarian, co-founder of optionMONSTER.com. "So I do think the clock is ticking for Mr. Ballmer, particularly with his old friend Bill Gates."
Najarian noted that Salesforce.com had a "phenomenal" run this year and doubts Microsoft would take it out right now. Joe Terranova , chief market strategist of Virtus Investment Partners, agreed.
UNUSUAL ACTIVITY: STEC
Shares of data storage company STEC jumped on takeover speculation Tuesday.
A month ago, options trader Jon Najarian saw a double bottom in the stock around 11. It's since held and the stock has been easing it's way up to 12. The stock is now putting in a double bottom at 12, he said and each time it gets there, the rumor mill starts turning. Institutions thinks something's going on through, as it traded six times full-day volume in the first three hours of trading Tuesday.
CHART OF THE DAY: HOME DEPOT
Goldman Sachs downgraded Home Depotto 'neutral' from 'buy' Tuesday, citing concerns over valuation.