Today: Two more acquisitions take Silicon Valley's total deals to more than $5 billion in the past week, and Oracle is reportedly working on a $5 billion deal of its own. Also: Wall Street gains as Tesla continues to shoot higher.
The Lead: SolarCity and Cisco make deals, Oracle reportedly next
A wave of mergers and acquisitions among Silicon Valley's largest tech companies continued Tuesday with another pair of deals, but a report suggested that Oracle is preparing to top them all with a monster purchase.
On Tuesday, SolarCity announced the $200 million acquisition of Fremont solar manufacturer Silevo, a move that will allow the company to follow the example of Elon Musk's other company, Tesla Motors, in manufacturing the key ingredient to its service. San Jose networking giant Cisco Systems also showed off a new purchase, spending $175 million to buy Swedish firm Tail-f Systems for a stronger virtualized networking offering.
Those deals could be put to shame if Oracle follows through on a deal reported Tuesday, which would have the Redwood City software giant spending $5 billion or more on Micros Systems, a Maryland software company that specializes in systems for hospitality and retail businesses. The acquisition would be the largest for Larry Ellison's company since the 2009 purchase of Sun Microsystems, but Oracle has spent billions on cloud software companies to boost its offerings in that arena, after Ellison famously scoffed at the software-as-a-service model.
"This would really be an acquisition for their retail arm and it would add another leg to their growth stool as they are more focused on their e-commerce and cloud strategy," FBR Capital Markets analyst Daniel Ives told Bloomberg News, which originally reported the talks.
Oracle's price may have increased after the report, though, as shares zoomed to match the price Bloomberg reported -- Micros stock gained 14.9 percent Tuesday to close at $66.33, giving the company a market capitalization of $4.96 billion.
Tuesday's acquisitions continued a big-money week that kicked off last Tuesday, when Google confirmed its $500 million purchase of satellite startup Skybox Imaging and San Jose touchscreen company Synaptics announced the $475 million acquisition of Japanese competitor Renesas SP Drivers. In a turnaround of sorts on Friday, it was the large Silicon Valley tech company being acquired: OpenTable accepted Priceline's offer of $2.6 billion for the San Francisco online-reservations company. On Monday, SanDisk agreed to acquire enterprise flash storage company Fusion-IO for a cash outlay of $1.1 billion, a total one analyst called a "steal."
All told, that's slightly more than $5 billion in confirmed acquisitions involving the 150 largest Silicon Valley tech firms in the past week, with a deal worth that much on its own reportedly in the offing. Such large purchases are not surprising considering Silicon Valley's technology companies have more cash in the bank than ever before, starting 2014 with half a trillion dollars on their books.
SolarCity stock jumped 17.6 percent to $64.53 -- easily the largest percentage gain of the day in the SV150 -- after the San Mateo company announced its acquisition and manufacturing plans Tuesday morning, and Cisco dropped 0.1 percent to $24.50 after its purchase.
SV150 market report: Tesla keeps gaining, Adobe leaps after earnings
Wall Street rode a gain from Silicon Valley tech stocks to an overall increase Tuesday, as Tesla Motors continued to shine and Adobe received a post-bell boost from its earnings report.
Tesla gained 3.1 percent to $231.67, its highest closing price since March 20, after experiencing its largest one-day jump in months on Monday. The continuing enthusiasm for Tesla shares Tuesday coincided with more positive news about the Palo Alto electric car maker's attempts to fight a ban on its direct-sales method in New Jersey. The state's Assembly passed a bill that would allow Tesla to have up to four stores in New Jersey; the new regulations still must be approved by the state Senate and be signed by Gov. Chris Christie to become law. Tesla may have also received a boost from Morgan Stanley analyst Adam Jonas, who released a laudatory note on the company for which he has a $320 price target. "Not even two years after the delivery of the first Model S, Tesla Motors has transformed from fledgling startup to arguably the most important car company in the world. We are not joking," Jonas wrote.
Adobe dropped 0.1 percent to $67.54 in the regular session Tuesday, but the San Jose software company zoomed higher in late trading after releasing earnings that showed net income of $88.5 million, or 17 cents a share, on sales of $1.07 billion. Shares topped $73.50 in late trading, which would be a new 52-week high for Adobe, as analysts praised Adobe's rapid adoption of a cloud model -- the company's cloud offerings topped 2.3 million users in its recently completed quarter. "I think the cloud transformation Adobe is going through should serve as a case study for the industry," IDC analyst Al Hilwa said in an email.
Apple fell 0.1 percent to $92.08 after the Cupertino company settled a civil class-action lawsuit against it stemming from its conspiracy to raise the prices of e-books, which already led to an antitrust verdict against the company. Google declined 0.3 percent to $550.61 after confirming that it would block independent musicians from posting videos to YouTube if they did not sign on to the video site's coming subscription-music service; Nest, which Google acquired for $3.2 billion earlier this year, resumed sales of its smoke detector after earlier pulling it off the market, though one feature is now absent. Facebook increased 0.3 percent to $64.40 after officially releasing its SnapChat rival, and Twitter stayed at $38.02 despite a strong recommendations from SunTrust analyst Robert Peck. Yahoo dropped 1.1 percent to $34.43 after CEO Marissa Mayer talked ads at Cannes and launched Tumblr sponsored posts across the Yahoo network, and Netflix added 3.1 percent to $443.65 after Morgan Stanley analyst Benjamin Swinburne predicted big things for the company. Gilead Sciences dropped 1.2 percent to $79.79 while continuing to face scrutiny for the price of its breakthrough hepatitis C medication, and Pandora Media gained 0.3 percent to $27.23 as rival iHeartRadio suggested it is gaining traction.
Up: SolarCity, Salesforce, SunPower, Tesla, Netflix, Electronic Arts, Zynga, Yelp, SanDisk, Juniper, AMD, Nvidia, Applied Materials, Symantec
Down: LinkedIn, Gilead, Yahoo, VMware, Splunk, Google, Intel, Apple, Cisco, Adobe, Intuit
The SV150 index of Silicon Valley's largest tech companies: Up 2.79, or 0.19 percent, to 1,490.85
The tech-heavy Nasdaq composite index: Up 16.13, or 0.37 percent, to 4,337.23
The blue chip Dow Jones industrial average: Up 27.48, or 0.16 percent, to 16,808.49
And the widely watched Standard & Poor's 500 index: Up 4.21, or 0.22 percent, to 1,941.99