For Immediate Release Chicago, IL – July 17, 2017 –Zacks Equity Research Applied Optoelectronics (NASDAQ: AAOI – Free Report ) as the Bull of the Day, Tableau Software (NYSE: DATA – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exa Corp. (NASDAQ: EXA – Free Report ), Microsoft (NASDAQ: MSFT – Free Report ) and Barracuda Networks (NYSE: CUDA – Free Report ). Here is a synopsis of all five stocks: Bull of the Day : Applied Optoelectronics (NASDAQ:AAOI – Free Report ) is now a $1.5 billion fiber optics component and system supplier, after a 25% rally in shares last week. That rocket launch came from an explosive combination of ingredients: 1) a company that has become a "serial pre-announcer" of positive sales and earnings surprises 2) a stock that was beaten down from its May highs near $75 after a growing bear thesis crept into the shares 3) a short interest of 10.37 million shares -- well over 50% of the float! -- that was like kindling in a bonfire when the company delivered this little message in a July 13 press release... "I'm pleased to announce that we expect to deliver another record quarter with our top and bottom-line results expected to exceed our guidance," said Dr. Thompson Lin, Applied Optoelectronics, Inc. founder, president and CEO. And here were the details... Second Quarter 2017 Preliminary Unaudited Financial Results · Revenue of approximately $117.3 million, above the prior outlook of $106.0 million to $112.0 million. · GAAP and non-GAAP gross margin in the range of 45.0% to 45.4%, above the prior non-GAAP outlook of 41.0% to 42.5%. · GAAP fully diluted earnings per share in the range of $1.37 to $1.42 and non-GAAP fully diluted earnings per share in the range of $1.31 to $1.36, using a weighted-average fully diluted share count of approximately 20.4 million shares. This is above the prior non-GAAP outlook of $1.09 to $1.19 per share, using approximately 20.4 million shares. And that is why AAOI popped from $72.64 (last Wednesday's close) to record highs over $86 on Friday, driving those holding the 10.377 million shares short to get out, or get burned. Bear of the Day : Tableau Software (NYSE:DATA – Free Report ), the exciting $4.9 billion provider of data visualization software and analytics for enterprise customers, is once again in the cellar of the Zacks Rank. This is not because estimates have come down further recently, but rather because they haven't started going back up yet. The stock is stuck in that no-man's land for earnings estimate revisions where we are not sure if they are going to continue southward, or forge a fresh turnaround. Since a mixed Q1 earnings report on May 3 -- a beat on adjusted EPS loss of 3-cents per share, but a miss on GAAP -- the stock has actually ground its way higher. And on June 13, Goldman Sachs upgraded shares to a Buy rating and the investment bank raised their price target to $78 from $59. Yet, we still saw no meaningful EPS estimate revisions higher. 2017 earnings estimates started out strong, but then reality set in. And this is always the challenge for an exciting SaaS technology company with optimistic Street expectations that fails to deliver, quarter after quarter. Missed On Top Line, But Business is Growing Tableau realized sales of $199.9 million, missing the Zacks consensus estimate of $201 million for Q1. Ratable license books were 26% of the company’s total license bookings, up from 12% in the prior-year quarter. The company said it closed 294 transactions greater than $100,000, up 10% year over year. Tableau added more than 3,300 customer accounts in the quarter. The company now has 57,000+ customer accounts. "Customers enthusiastically embraced our subscription licensing offerings in Q1, as reflected in our 26% ratable license bookings mix," said CEO Adam Selipsky. "Subscription reduces risk for our customers, lowers their upfront investment and we expect will lead to higher demand for Tableau over time.” The Meaning of DATA In the digital age, we are flooded in information and the new data sources are multiplying exponentially with the Internet of Things. Tracking and measuring data to make business decisions has never been more important for corporations. But the deluge of data can be overwhelming, and knowing how to track, measure, and decide has become a giant rabbit's hole for many. The solution is learning to harness and harvest the flood of data in new, compelling, and scientifically relevant ways. So the folks at Tableau ask... What happens when you put together an Academy Award-winning professor, a brilliant computer scientist at the world's most prestigious university, and a savvy business leader with a passion for data? You get solutions for one of the most challenging problems in software: making databases and spreadsheets understandable to ordinary people. The mind behind Pixar, Stanford Professor Pat Hanrahan realized too it was a project that could change the world. A founding member of Pixar and chief architect for RenderMan, Pat had already transformed the world of animated film. He says... "We create pictures that answer questions, but we do it for businesses that want to know things about their data." Hanrahan and a team of Stanford Ph.D.s realized that computer graphics could deliver huge gains in people’s ability to understand data. The breakthrough arose when they brought together two computer science disciplines for the first time: computer graphics and databases. Their invention VizQL™ let people analyze data just by building drag & drop pictures of what they wanted to see. Let's hear how the company describes their mission... We help people see and understand their data. Eight words that drive everything we do. And they’ve never been more important. In 2020 the world will generate 50 times the amount of data as in 2011 and 75 times the number of information sources (IDC, 2011). Within these data are huge opportunities for human advancement. But to turn opportunities into reality, people need the power of data at their fingertips. Tableau is building software to deliver exactly that. Bottom line on DATA: If they execute on their mission, this exciting company could become the Adobe, or maybe even the Microsoft of the 21st century. When the Zacks Rank turns around, and you can visualize it on the Zacks Price & Consensus chart, you'll want to be a buyer. Additional content: Tech Sector Applauds Gartner IT Spending Forecast The world’s leading research and advisory company – Gartner Inc. – recently raised its forecast for Worldwide IT spending for 2017, giving technology companies a reason to cheer. What Gartner Predicts The firm now anticipates global IT spending to mark a 2.4% year-over-year increase, up from its previous forecast of 1.4%. In dollar terms, IT spending will reach $3.48 trillion from the prior projection of $3.41 trillion. If this happens, the year will mark a solid recovery in IT spending after two consecutive years of decline. Notably, in 2015 and 2016, worldwide spending declined 5.5% and 0.6%, respectively. This is the third time when Gartner has revised its forecast for 2017 IT spending. Earlier, the firm had lowered its expectations on two occasions from the original forecast of 2.9%. Its estimate was first brought down to 2.7% in Jan 2017, followed by another drop to 1.4% in April, citing enterprise customer moving to cloud and strong U.S. dollar as the main reasons. However, Gartner has now become optimistic, once again. The research firm noted two major catalysts which, it believes, will drive IT spending this year. The first catalyst highlighted by Gartner is decline in the U.S. dollar against several foreign currencies. Secondly, the firm foresees an uptick in digital transformation projects in the near term which will enable organizations to spend more on IT related infrastructure, products and services. According to John-David Lovelock, vice president and distinguished analyst at Gartner, digital business is deeply impacting business operations. In addition, it is creating innovative categories, such as the convergence of ‘software plus services plus intellectual property.’ Such next-generation offerings are backed by business and technology platforms, which will later act as catalysts for fresh categories of spending. He further mentioned that some of the Industry-specific disruptive technologies include the Internet of Things (IoT) in manufacturing, blockchain in financial services (and other industries), and smart machines in retail. It should be noted that disruptive technology has been transforming business. Computer and Technology Sector 5YR % Return Segmental Growth Expectation Per Gartner’s latest report, every IT segment will witness growth in spending, with Enterprise Software leading the way. It may witness a 7.6% rise this year and reach $351 billion. As more organizations will undergo digital transformation, there will be greater need for automation and application functionality, which will stoke the segment’s growth, cited Gartner. This will be followed by the Devices segment (PCs, tablets, ultramobiles and mobile phones), which is anticipated to register 3.8% growth in spending and reach $654 billion, mainly driven by strong sales of mobiles. The research firm stated that increased mix of basic phones over utility phones and higher average selling prices of premium phones in mature markets will drive Mobile phone growth in 2017. The IT Services segment is anticipated to register 3.1% growth in spending and reach $922 billion. Spending across the Data Center Systems segment may see a 0.3% increase and touch $171 billion. Communication Services segment is likely to witness 0.3% growth and reach $1.378 trillion. Apart from revising estimates for 2017, the IT research firm also updated its forecasts for 2018, which is higher than its previous forecast. For 2018, Gartner predicts worldwide spending to reach $3.6 trillion, marking growth of 3.5% from the 2017 estimated level. The revised figure is higher than the previous projection of 2.9% growth and $3.56 trillion. The Enterprise Software segment will continue to lead with 8.6% anticipated growth, while IT Services, Devices, Communication Services and Data Center Systems segments will witness respective increases of 4.7%, 3.6%, 1.6% and 1.2% in spending. However, it should be noted that despite projections of growth in 2017 and 2018, the overall IT spending will remain below the 2014 level of $3.8 trillion. Bottom Line In 2015 and 2016, worldwide IT spending was hit hard by global concerns such as a persistent decline in oil prices, slowdown in the Chinese economy and a strong U.S. dollar against major currencies. Additionally, last year’s events like the hype over Brexit, the U.S. Presidential election and the Fed rate hikes also made organizations tighten their spending on IT. Nonetheless, the optimistic forecast provided by Gartner depicts that this year may witness a revival in overall spending, primarily led by Software, Devices and IT Services segments. So, it will be prudent to shift your focus to Software, Devices and IT Services stocks which still hold promise. Stocks like Exa Corp. (NASDAQ: EXA – Free Report ), Microsoft (NASDAQ: MSFT – Free Report ) and Barracuda Networks (NYSE: CUDA – Free Report ), are backed by buy ratings. While Exa sports a Zacks Rank #1 (Strong Buy), Microsoft and Barracuda Networks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here . Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter: About the Bull and Bear of the Day Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months. About Zacks Equity Research Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. 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All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report Tableau Software, Inc. 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