Oracle (ORCL): Tech Prospers (NT)(MSFT)(GOOG)(JAVA)

Shares in some tech companies are down as far as the banks and brokerage firms. Sun (JAVA) and Nortel (NT) are in that group, but they are hardly alone. Firms which have the  lead of their sectors, especially Microsoft (MSFT) and Google (GOOG) have experienced significant drops in their market caps. Both stocks are down over 30% so far this year.

Larry Ellison, the third richest man in America, gave Bill Gates and the founders of Google a reason to rejoice. The company he founded, Oracle (ORCL), did much better than expected last quarter and hinted that the trend would continue for the portion of the future it can see.

Oracle’s fiscal first quarter earnings were up 29% to nearly $1.1 billion. Revenue rose 18% to $5.3 billion.

It should have been expected that sales from software upgrades would be good, and they were. Many large companies cannot afford going without the improved and more efficient products.

What was surprising is that Oracle said new software sales were still relatively strong. IT spending at larger enterprises is not moribund as some on Wall St. expected.

Oracle made one more encouraging remark which was that it was not being murdered by a drop in spending in the financial services sector.

Due to its tremendous size and operations around the world, Oracle is a near-perfect prism for looking at the picture of big tech.

IT spending is fine which means that many of the stocks in the sector are oversold.

Douglas A. McIntyre