Crowdstrike, Workday stocks dip as Deutsche Bank downgrades software names

Yahoo Finance Live anchors discuss Deutsche Bank software downgrades.

Video Transcript

[AUDIO LOGO]

- Speaking of Technology, we got yet another call for you on it. Deutsche Bank expecting another tough year for software stocks in the US. They are downgrading five different companies, including Crowdstrike and Workday. Now both of those have hold ratings. Here's another--

- Kyle crushing it. Look at this guy.

- --lovely recommendation fullscreen for you. The bank did upgrade Shopify and Confluent, as they expect Shopify to outpace overall US e-commerce growth throughout 2023. So it's interesting as we get some of these various technology calls to start the year. It's important, always, to note to note as investors, right? You can't always tar the same-- the whole industry with the same brush, right? You want to be sort of selective, even within some of these industries, and that's what that chip call sort of illustrates. That's what this software call illustrates as well. that's a lot of-- that's a lot of hold ratings.

- And also important from Deutsche Bank, which I think just hangs over tech stocks more broadly, Brad Zelnick noting that these investors are seeking confirmation of a bottom on fundamentals. And even with these layoffs, you still don't get the sense that, you know, Microsoft, and Amazon, you name, their fundamentals have bottomed yet because of the slowdown in their sales growth.

- I want to come back to one of the themes though within the Deutsche Bank calls that we had seen, and one of them was cybersecurity. There's a huge wave of cybersecurity spending that's been kind of unlocked by major corporations, whether they're B2B side or B2C. And so for customers who perhaps are doing more of that shopping on a Shopify, they want to feel like if they're engaging with more of the kind of social marketplace, if you will.

And Instagram has, essentially, become the metaverse mall if you will. And just making it more shoppable has been where Shopify and then some of on the, other side of that, the processors and cybersecurity that's necessary layered in on top of that. It's necessary for Meta Platforms to buy further into. It's necessary for a Shopify to buy further into. It's necessary for the financial transactions processors as well. And so cybersecurity is sitting, kind of, at the intersection of all of that I think really goes into that Deutsche Bank call. So just trying to weave in all of those themes there.

Yeah, some of the interesting specifics on Shopify as well from Bhavin Shah, who upgraded Shopify. He talks about the partnerships that Shopify has with brands like Mattel and Supreme. And he also talked about the biggest potential catalyst for the stock, one of them, is the launch of Commerce Components, so that allows big retailers to pay for access to Shopify software. And he says that could prompt migrations to Shopify. So interesting here, and interesting we're seeing the stock definitely react to that positive call.

- Yeah, really exciting.