Why Rackspace, Autodesk, and Verizon are Soaring

Shares of Rackspace, Autodesk, and Verizon are up big on Friday.

May 16, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) had gained a scant two points as of 11:30 a.m. EDT. Verizon Communications (NYSE:VZ) was the index's biggest gainer, while tech stocks Autodesk (NASDAQ:ADSK) and Rackspace (NYSE:RAX) also surged to the upside.

Consumer confidence disappoints
Data on consumer confidence came in short of expectations early on Friday. The University of Michigan survey produced readings of 73.2 for consumer expectations and 81.8 on consumer sentiment. Economists had anticipated respective readings of 75 and 84.5.

Consumer confidence data isn't considered a vital economic reading, but it does suggest U.S. consumers may be struggling to a greater degree than economists had figured.

Autodesk rises on earnings
Shares of software company Autodesk were up 6% on Friday after the company reported a quarter that was better than what analysts had expected.

Autodesk earned $0.32 per share on revenue of $592.5 million in the first quarter. Analysts had anticipated earnings of $0.21 per share on revenue of about $568.6 million. In the wake of its earnings release, Canaccord reiterated its buy rating and $60 price target.

Rackspace says it might get acquired
In an SEC filing released Thursday afternoon, cloud storage specialist Rackspace said it had been approached by "multiple parties" about a strategic relationship or full-blown "acquisition." Rackspace said its management had hired bankers to weigh the strategic proposals and explore other alternatives.

Once a highflier, Rackspace has come under heavy selling pressure in recent months, and shares are down nearly 8% over the last year. Competition in the cloud space has increased significantly, and Rackspace's business appears threatened by a number of larger competitors.

There's no guarantee that Rackspace will get acquired, but investors appear to be betting on the possibility, with shares up 20% early in Friday's session.


Source: Wikimedia Commons.

Verizon jumps after Warren Buffett reveals stake
Verizon shares rose more than 2% on Friday, a notable jump for the behemoth telecom stock. The gain comes in the wake of a major disclosure: Warren Buffett has acquired a stake in Verizon worth more than $500 million.

Buffett held his stake in Verizon as of the end of March, but given his propensity to hold positions for long periods of time, it's likely that he's still invested in the telecom giant. Other hedge fund managers, including John Paulson and Dan Loeb, also revealed stakes.

Although blindly following famous investors can often be a recipe for disaster, Buffett's legendary track record ensures that anytime he adds a new position, the market is sure to notice. With a below-market multiple, a solid dividend, and a fairly steady business, Verizon appears to be a typical Buffett pick.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Rackspace Hosting. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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