Salesforce (CRM, $74.42 after hours, -6.3%) reports solid fiscal Q2 (July) results (revenue rose 25% to $2.04 billion, above the consensus estimate of $2.02 billion), but on the call management said there was some softness in the U.S. at the end of the quarter. Guidance for FQ3 came in below expectations.

In FQ2, all four of the company’s main cloud segments (Sales, Service, App & Marketing) showed decelerated y/y growth compared to the previous quarter. 

For FQ3 (Oct.), EPS guidance of 20 cents to 21 cents falls short of the consensus estimate of 24 cents. Revenue guidance of $2.11 billion to $2.12 billion is just below the consensus of $2.13 billion. Deferred revenue growth in the current quarter is expected to slow to 20% from 26% in FQ2.

Salesforce shares are down more than 6% after hours.

Shares of cloud-software vendor New Relic (NEWR, $36.49) today are showing relative strength in a down market for tech. 

There is short-term resistance at $36.89. After that, the next resistance levels to watch: $37.53 and $38.40. The all-time high of $40.13 was reached early last November.

The 50-day moving average is trending upward from $33.40, while the 200-day moving average has begun to turn upward from $30.39.

OpCo upgrades Pure Storage (PSTG, $11.90) to ‘Outperform’ with a price target of $15, saying it’s bullish on the company’s ability to capitalize on differentiated technology, all flash array growth and opportunities with new products. 

The firm believes the new FlashBlade product is capable of more than doubling Pure’s TAM over the longer term. A fast ramp of the product is expected starting next year, as the manufacturing lifecycle matures and feature set improves, says OpCo.

SunTrust upgrades VMware (VMW, $75.73) to ‘Buy’ and lifts its price target to $92 from $64. 

The firm expects revenue growth to accelerate through the end of the decade thanks to VMware’s effective diversification beyond its server virtualization roots.

SunTrust says VMware is now a much broader access, cloud and datacenter software provider.

Pacific Crest upgrades Fortinet (FTNT, $36.31) to ‘Overweight’ with a price target of $47 based on growth potential in the upper end of the SMB market and a commitment to improve profitability through cost cutting.

The firm says Fortinet is wise to reduce the amount it spends on marketing its security solutions in the “highly competitive” large enterprise segment.

Shares of Facebook (FB, $126.54) closed the session above resistance at $126.09 from early August. The all-time high of $128.33 was reached on July 28. 

The 50-day moving average continues to trend upward from $120.26.

William Blair upgrades Netflix (NFLX, $95.18) to ‘Outperform’ with a price target of $145 based on the potential for better than expected domestic subscriber growth among younger demos into 2020. 

The firm also calls out Netflix’s original content, saying it’s under-appreciated as a competitive differentiator.

In a weak session for the overall tech sector (Nasdaq Composite off 0.8%), ServiceNow (NOW, $72.77) shares showed relative strength, gaining 0.2%. 

While down from the late July high of $78.77, the stock is managing to hold above its 200-day moving average of $71.24.

After hitting a new all-time high of $813.88 on August 11, Alphabet (GOOGL, $794.01) shares have pulled back below the $800 level. 

The 50-day moving average continues to advance from $754.46 after recently crossing above the 200-day moving average of $747.69. 

There is short-term support at $785. A pullback to $769 would close the Q2 earnings-related gap on the price chart.

Shares of Twilio (TWLO, $56.08) reversed to the downside today and closed with a loss of 4.3% on heavy volume. The intraday high of $61.35 was above yesterday high of $59.75. 

The post-IPO high stands at $66.40 from August 15. Traders are keeping an eye on last Friday’s low of $51.85.

For more on Twilio, see TechStock Radar—August 17, 2016.

Mobileye (MBLY, $46.56) and Delphi Automotive announce a partnership to develop a complete Level 4/5 fully automated driving (AD) solution. 

The partnership will accelerate the time to market and enable customers to adopt Level 4/5 automation without the need for huge capital investments.

The new AD platform, based on key technologies from each company, will be demonstrated in combined urban and highway driving at the 2017 CES, with production ready for 2019.

After last week’s push above the downtrend line from the late March high, Palo Alto Networks (PANW, $137.54) shares are consolidating around current levels. 

The 50-day moving average has leveled off at $127.87, while the 200-day moving average continues to drift downward from $147.18.

There is short-term resistance at $139.10. In addition, there is resistance at $140.83 from early June and $148.30 from late May.

After pulling back from last week’s post-IPO high of $124.90, Acacia Communications (ACIA, $117.75) shares are on the rebound from Friday’s low of $111.31.

As recently as August 3, Acacia shares were trading below $60.

Acacia, a provider of optical interconnect products for cloud infrastructure operators and communications service providers, went public in May at $23 a share. The stock on the first trading day opened at $29.

After rising 5.2% yesterday, Rapid7 (RPD, $18.48) shares today tacked on 7.9%. Volume in today’s session surged to 1.16 million shares, 5x average daily volume.

For the week, the stock was up 18%.

For more on Rapid7, a provider of cybersecurity solutions, see TechStock Radar—August 18, 2016.

Shares of Five9 (FIVN, $14.09) today gained 3% and hit a new all-time high at $14.11. 

We profiled the provider of cloud-based software for customer service centers back in the July 2014 issue of Tech-Stock Prospector (TSP #149), when the stock was trading around $7.

For more on Five9, see TechStock Radar—August 4, 2016.

Morgan Stanley reiterates its Salesforce (CRM, $77.19) price target of $110, saying its quarterly checks came back positive across the company’s product portfolio. 

The firm believes the set-up into FQ2 (July) results (out next Wednesday) is attractive based on solid top-line growth and sustained secular tailwinds. 

Morgan Stanley sees potential upside in FY’17 from the recently completed Demandware acquisition.

Shares of Marvell Technology (MRVL, $11.94) are approaching short-term resistance at $12.05, the 52-week high reached in late July. After that, there is resistance at $13.35 from last August.

Both the 50-day and 200-day moving averages are trending upward.

Wedbush lifts its Splunk (SPLK, $63.83) price target to $70 from $60, saying reseller checks indicate the company is positioned for continued outperformance. The firm calls out Splunk Cloud as a key growth driver going forward.

Shares of Rapid7 (RPD, $16.84), a provider of cybersecurity solutions, today pushed through short-term resistance at $16.65. The RSI stands at 76.5. 

The next resistance level to watch is $17.93 from December. After that, there’s resistance at $22.14 from November.

In February, the stock hit a post-IPO low of $9.05.

The 50-day moving average of $13.70 is approaching the 200-day moving average at $14.07 for a potential upside crossover.

Twilio (TWLO, $57.47) shares continue to retreat from Monday’s post-IPO high of $66.40. From the August 3 low of $37.20, the stock had surged 78% to that high.

The company, provider of a cloud-based communications software platform, went public in June at $15 and opened for trading at $23.99.

Jennison Associates was the biggest Q2 buyer of Palo Alto Networks (PANW, $135.60). The firm increased its stake by 32%, adding 1.16 million shares. 

Jennison now owns 4.76 million shares, making it the #2 holder behind Vanguard.

In Q2, activist investor Elliott Associates opened new positions in two security vendors:

*Fortinet (FTNT, $33.87)—2.74 million shares 

*Qualys (QLYS, $31.54)—1.31 million shares

OpCo starts Tableau Software (DATA, $54.63) at ‘Outperform’ with a price target of $62 based on a number of positive catalysts:

1-Growing importance & adoption of analytics tools across all business functions

2-New customer additions & deeper account penetration

3-Sales productivity gains

4-Accelerating adoption of Tableau Online

Shares of security solutions vendor Proofpoint (PFPT, $76.10) today hit an all-time high at $77.15.

We analyze Proofpoint’s strong Q2 results in the August 2016 issue of Tech-Stock Prospector. 

Proofpoint has been in the TSP Small-Cap Portfolio since September 2013, when the stock traded at $27.91.

Shares of NVIDIA (NVDA, $63.04) today gained 5.5% and reached an all-time high of $63.38 after the company reported strong fiscal Q2 (July) results and raised guidance. The quarter was driven by the successful launch of Pascal-based graphics chips.

Fiscal Q2 EPS of 53 cents topped the consensus estimate by five cents on revenue of $1.43 billion (+24% y/y), vs. the consensus of $1.35 billion.

For FQ3, NVIDIA expects revenue of $1.65 billion to $1.71 billion, vs. the consensus of $1.45 billion.

We profiled NVIDIA in the April 2016 issue of Tech-Stock Prospector (TSP #170). At the the time, the stock was trading around $36.30.

Piper Jaffray raises its CyberArk Software (CYBR, $55.31) price target to $60 from $55, saying it believes the company is well positioned to deliver solid beat-and-raise quarters going forward.

JP Morgan points out that Q2 billings growth missed expectations, but argues CyberArk is a perpetual license and maintenance business, where revenue growth and margin expansion are much better indicators of underlying health. The firm maintains its price target of $59.

CyberArk Software (CYBR, $55.31) reports Q2 EPS of 29 cents, nine cents above the consensus estimate, on revenue of $50.4 million (+39& y/y), vs. the consensus of $48.2 million. License revenue rose 35% to $30 million.

For Q3, the company expects EPS of 21 cents to 23 cents (the consensus is 21 cents) on revenue of $51.5 million to $52.5 million (the consensus is $52 million).

CyberArk raises its 2016 revenue guidance outlook:

NEW: $210.5 million to $212.5 million

OLD: $209 million to $211 million

Consensus: $210.8 million

Shares of Pure Storage (PSTG, $13.50) have rebounded 40% off of the June low of $9.62. The RSI is up to 75.9. 

The stock is now approaching the 200-day moving average, which is trending downward from $13.83.

Since we profiled Pure Storage in the June 2016 issue of Tech-Stock Prospector (TSP #172), the shares have advanced 15%.

Needham raises its Microchip Technology (MCHP, $56.63) price target to $70 from $60 after the company last night reported fiscal Q1 (June) EPS of 84 cents, nine cents above the consensus estimate. Revenue of $844 million came in well above the consensus of $821.3 million.

The company said the core Microchip and Atmel microcontroller business units achieved strong revenue growth that exceeded internal expectations. In April, Microchip completed its $3.6-billion acquisition of Atmel.

For FQ2, Microchip sees EPS of 83 cents to 91 cents (the consensus is 80 cents) on revenue of $844 million to $877.8 million (flat to up 4% sequentially), vs. the consensus of $838.8 million.

Needham says it expects possible earnings upside over the next several quarters, as Microchip folds Atmel’s operations into its efficient operating model. 

The firm believes Microchip has long-term earnings power of $4.30+ a share based on continued core business growth, microcontroller market share gains and a turnaround of the Atmel business.

Pacific Crest looks for notebook shipments to show somewhat greater upside in Q3 than previously expected, a positive tailwind for Intel (INTC, $34.96). 

The firm says conversations with notebook ODMs indicate expected shipment upside in August and September driven by new product launches and inventory replenishment for the back-to-school season at OEM customers. 

Component suppliers are likely to benefit from restocking off of lean Q2 inventory levels, says Pacific Crest.

Jefferies raises its NVIDIA (NVDA, $58.20) price target to $69 from $56, saying there is high probability of earnings upside surprises over the next 6-18 months given the product momentum. 

The firm calls out NVIDIA’s launch of the new 16nm GPU platform Pascal (for gaming and the datacenter) as well as the initial ramp of the high-ASP (and high-margin) VR products.

Cowen raises its Arista Networks (ANET, $71.04) price target to $85 from $78, saying Q2 results released last night reinforce the company’s growth trajectory. 

Revenue in the June quarter rose 37% to $268.7 million, above the consensus estimate of $262.8 million.

The firm is bullish on Arista’s competitive positioning related to the datacenter switching upgrade cycle.  

For Q3, Arista sees revenue of $279 million to $285 million, vs. the consensus of $279.6 million.

Security solutions vendor Imperva (IMPV, $45.01) announces that its BoD has initiated a review of strategic alternatives, hiring Qatalyst Partners as a financial advisor. The company will consider all options to enhance shareholder value.

Imperva recently issued a negative Q2 pre-announcement, blaming extended sales cycles across most geographies and verticals, predominantly related to larger deals. 

Today, the company offers Q3 revenue guidance of $62 million to $64 million, below the consensus estimate of $71.5 million.

For 2016, Imperva now sees revenue of $248.6 million to $250.6 million, below the consensus of $276.28 million.

Back in the July 2014 issue of Tech-Stock Prospector (TSP #149), we wrote that Five9 (FIVN, $12.99), a provider of cloud-based software for customer service centers, was on a promising path. 

We called out Five9 as a beneficiary of the broad trend of contact centers moving to the cloud.

The stock at the time was trading right around the April 2014 IPO price of $7. 

Today, Five9 shares are up more than 4% and have hit an all-time high at $13.50 after the company last night reported above-consensus Q2 results, with revenue growth of 28%.

For Q3, the company sees revenue of $38.6 million to $39.6 million, vs. the consensus of $37.9 million.

Five9 raised its 2016 revenue guidance:

NEW: $155.8 million to $157.8 million

OLD: $151.5 million to $154.5 million

Consensus: $153.4 million

Shares of Paycom (PAYC, $50.21) today hit a fresh all-time high at $50.67 after the provider of cloud-based HCM solutions last night reported Q2 EPS of 21 cents, eight cents above the consensus estimate, on revenue of $73.8 million (+51% y/y), vs. the consensus of $70.6 million.

For Q3, the company expects revenue of $75 million to $77 million, vs. the consensus of $75.6 million.

Paycom again raised its 2016 revenue guidance range: $325 million to $327 million, vs. $320 million to $322 million previously (the consensus was $322 million) and $309 million to $311 million before that.

Credit Suisse raises its HP Enterprise (HPE, $20.80) price target to $25 from $21 following chatter about potential interest from private equity. 

The firm says the “subscale” software unit is “clearly one candidate for sale, ” and it sees little revenue synergy across the remaining businesses. 

In a full-scale breakup of the various parts of HPE, Credit Suisse estimates the company could be worth $31 a share.

For more on HP Enterprise, see TechStock Radar—July 29 & July 25, 2016.

Rosenblatt starts Proofpoint (PFPT, $75.30) at ‘Buy’ with a price target of $95, saying the company has been one of the most consistent security vendors in terms of execution. 

Q2 delivered a significant beat across multiple metrics (including the bottom line), pointing to the power of the SaaS model and Proofpoint’s ability to up-sell new products to both the installed base and new customers, says the firm.

Rosenblatt expects Proofpoint to continue to leverage its market leading position in email security to expand into new markets. 

Fleetmatics (FLTX, $59.59), one of our 5 top software takeover targets profiled in the June 2016 issue of Tech-Stock Prospector, has agreed to be bought out by Verizon (VZ) for $60 a share. 

That’s a 40% buyout premium to the Fleetmatics stock price of $42.87 at the time of our article.

Tech-Stock Prospector subscribers should see today’s Rob’s Journal for our latest list of software buyout ideas.

Shares of FireEye (FEYE, $17.44) are locked in a broad sideways pattern, while remaining above the now upwardly sloping 50-day moving average of $16.26. The 200-day moving average continues to trend downward from $18.33.

There’s short-term resistance at $18.42. Additional resistance stands at $18.73 (April), $19.17 (March) and $19.63 (March).

Fleetmatics (FLTX, $42.96), a provider of cloud-based fleet & mobile workforce management solutions, will be acquired by Verizon (VZ) for $60 a share in cash in a deal worth ~$2.4 billion. 

The deal premium compared to Friday’s close is 39.6%. The transaction is expected to close in Q4.

Fleetmatics was one of the 5 top takeover targets in the software sector that we profiled in the June 2016 issue of Tech-Stock Prospector (TSP #172). At the time, Fleetmatics shares were trading at $42.87.