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Cloudcomputing

Can Giants Maintain AI Dominance While Pursuing Independence?In the ever-evolving landscape of artificial intelligence, Microsoft stands at a fascinating crossroads that challenges conventional wisdom about technological partnerships and innovation. The tech giant's recent strategic moves present a compelling case study of how market leaders can simultaneously strengthen their AI capabilities while reducing dependencies on key partners. This delicate balance could reshape the future of enterprise AI. Microsoft's remarkable journey is highlighted by Wall Street's growing confidence, with Loop Capital's target price increase to $550 reflecting strong market optimism. This confidence isn't merely speculative – it's backed by substantial investments, including a staggering $42.6 billion allocated to cloud and AI infrastructure in Q3 2024 alone. The company's financial performance reinforces this positive outlook, with earnings consistently exceeding expectations and revenue growing at an impressive 16% year-over-year. What makes Microsoft's strategy particularly intriguing is its nuanced approach to partnerships and innovation. While maintaining its strategic alliance with OpenAI, the company actively diversifies its AI portfolio by developing internal models and exploring third-party integrations. This sophisticated balancing act, combined with strong institutional ownership and strategic insider movements, suggests a company that's not just adapting to change but actively shaping the future of AI enterprise solutions. The remaining question isn't whether Microsoft will maintain its market leadership, but how its strategic evolution will redefine the boundaries between partnership and independence in the AI era.
NASDAQ:MSFTLong
by UDIS_View
Can a Tech Giant Rewrite Its Future While Racing Against Time?In a remarkable display of corporate resilience, Super Micro Computer stands at the intersection of crisis and opportunity, navigating regulatory challenges while simultaneously revolutionizing the AI infrastructure landscape. As the company addresses its Nasdaq compliance requirements through comprehensive reforms, including the strategic appointment of BDO USA as its new independent auditor, it hasn't missed a beat in its technological innovation trajectory - a feat that has left critics and supporters watching intently. The numbers tell a compelling story of growth amidst adversity: a staggering 110% revenue surge to $15 billion in FY2024, coupled with a nearly 90% increase in adjusted earnings. But, perhaps more impressive is Supermicro's technical leadership, maintaining an 18-24 month advantage over competitors in liquid-cooled AI rack technology and demonstrating the capability to deploy 100,000-GPU liquid-cooled AI data centers. This technical prowess, combined with strategic partnerships with industry giants like NVIDIA, positions Supermicro at the forefront of the AI infrastructure revolution. Looking ahead, Supermicro's journey represents more than just a corporate turnaround story - it's a masterclass in organizational agility and strategic focus. While many companies might have faltered under the weight of regulatory scrutiny, Supermicro has instead used this moment as a catalyst for transformation, strengthening its corporate governance while accelerating its innovation pipeline. With analyst projections indicating 40%+ earnings growth for FY2025 and revenue expected to surge over 70%, the company's trajectory suggests that sometimes, the most significant opportunities for growth emerge from the crucible of challenge.
NASDAQ:SMCILong
by signalmastermind
Can a Crystal Ball Really Predict the Future of Tech?In an era where artificial intelligence promises to reshape the technological landscape, Palantir Technologies has emerged as a testament to the power of long-term vision meeting present opportunity. The company's remarkable third-quarter performance, marked by a 30% revenue surge to $725.5 million and doubled net income, isn't merely a financial triumph—it's a validation of two decades spent perfecting the art of data analytics while others were still grappling with its fundamentals. What sets this trajectory apart is Palantir's unique ability to bridge two seemingly disparate worlds. On one side, its deep-rooted expertise in government and defense contracts, evidenced by a 40% growth in U.S. government sales to $320 million, demonstrates unparalleled capability in handling sensitive, mission-critical data. On the other, its commercial division's explosive growth, particularly in the U.S. market with a 54% revenue increase, reveals an organization that has successfully translated complex government-grade technology into practical business solutions. The company's strategic positioning, however, tells a more intriguing story beyond the numbers. While competitors scramble to adapt to the AI revolution, Palantir's Artificial Intelligence Platform (AIP) represents the culmination of years spent understanding the nuances of data integration and security. This foundation, combined with innovative approaches like their hands-on "boot camps" where clients work directly with Palantir engineers, suggests that perhaps the company named after Tolkien's all-seeing orbs has indeed developed a knack for anticipating the future of enterprise technology.
PLong
by signalmastermind
Can a Tech Giant Redefine the Future of Enterprise Computing?In an era where technology companies rise and fall with stunning rapidity, Dell Technologies has orchestrated a remarkable transformation that challenges conventional wisdom about legacy tech companies. The company's strategic positioning in the hybrid cloud market, coupled with recent market disruptions affecting competitors like Super Micro Computer, has created an unprecedented opportunity for Dell to reshape the enterprise computing landscape. Dell's masterful execution of its hybrid cloud strategy, particularly through its groundbreaking partnership with Nutanix, demonstrates the power of strategic evolution. The integration of PowerFlex software-defined storage and the introduction of the XC Plus appliance represent more than mere product innovations—they exemplify a deeper understanding of how enterprise computing needs are fundamentally changing. This transformation is particularly evident in regions like Saudi Arabia, where Dell's two-decade presence has evolved into a catalyst for technological advancement and digital transformation. The financial markets have begun to recognize this shifting dynamic, as reflected in Dell's impressive 38% year-over-year growth in infrastructure solutions revenue. However, the true significance lies not in the numbers alone, but in what they represent: a traditional hardware company successfully pivoting to meet the complex demands of the AI era while maintaining its core strengths in enterprise computing. For investors and industry observers alike, Dell's journey presents a compelling case study in how established tech giants can not only survive but thrive in an era of rapid technological change.
NYSE:DELLLong
by signalmastermind
Is Intel's New Process Node a Game-Changer?Intel's latest reveal, the Intel 3 process node, promises to revolutionize the tech landscape with substantial performance and efficiency gains. But could this be the strategic breakthrough Intel needs to outmaneuver its competition? Enhanced Performance and Density for Leading-Edge Computing Intel's commitment to process technology leadership leaps forward with the Intel 3 process node, boasting an impressive 18% performance improvement and a 10% density increase over the previous generation. Tailored to meet diverse customer needs, Intel 3 offers four distinct variants, each optimized for specific applications, from high-performance computing to AI. First Leading-Edge Foundry Node Drives Ecosystem Growth Intel 3 marks a pivotal shift in Intel's strategy, as its first leading-edge process technology is made available to external customers through Foundry services. This move positions Intel as a key player in the foundry market, potentially reshaping the competitive landscape. Manufacturing Readiness and High-Volume Production Achieving manufacturing readiness in late 2023, the Intel 3 node has successfully transitioned to high-volume production, powering the Intel Xeon 6 processor family. This real-world application demonstrates its capability in server-grade computing solutions, solidifying Intel's technological prowess. A Stepping Stone to the Future of Computing As the final evolution of Intel's FinFET technology, the Intel 3 node provides a robust foundation for future advancements, paving the way for the forthcoming RibbonFET technology and the Angstrom era with Intel 20A and 18A process nodes. Curious to know more about how Intel's latest innovation could impact the future of computing? Dive into the full analysis and uncover the potential ripple effects on the semiconductor industry.
NASDAQ:INTCLong
by signalmastermind
Amazon (AMZN) AnalysisE-commerce Leadership and Cloud Dominance: Amazon NASDAQ:AMZN , a global e-commerce leader, also dominates the cloud computing market with Amazon Web Services (AWS). AWS, crucial for future AI growth, offers high margins and robust recurring revenue through its rental model after initial infrastructure investment. AWS contributed 62% of Amazon's $15.3 billion operating profit in Q1, despite only accounting for 18% of sales. Strategic Investment and Future Growth: CEO guidance suggests increased capital expenditures to expand data centers for rising AI demand, promising strong future free cash flow and improved margins. Investment Outlook: Bullish Outlook: We are bullish on AMZN above the $168.00-$170.00 range. Upside Potential: With an upside target set at $220.00-$230.00, investors should consider Amazon's strategic investments and dominant market positions in both e-commerce and cloud computing as key drivers for potential stock appreciation. 📊🛒 Monitor Amazon for promising investment opportunities! #AMZN #CloudComputing 📈🔍
NASDAQ:AMZNLong
by Richtv_official
SNOWFLAKE breaking long time resistanceThere is a multi year resistance around $205 for NYSE:SNOW Signs I'm looking for: Top of channel to become support, a bounce off there and a move into $220 should confirm that. I want to see the SuperTrend indicator stay green, upwards of the level of where the red downtrend line exists. SuperTrends on higher time frame charts work the best. It's often pretty solid when used on individual stocks rather than an index. Take a look at the supertrend (strategy) and mess around with different time frames. You'll see the cumulative return is very high, often much higher than just buying and holding the equity. Let me know what you think : )
NYSE:SNOWLong
by DontSlamTheDoor
6
$ANET: Arista looks 'excellent' indeedJust as the greek word, the chart here looks excellent...There's both a daily and a monthly uptrend signal active, which gives this stock tremendous reward to risk potential long term. I am not a huge fan of the valuation, so I was skeptical to get involved but perhaps I am missing something regarding fundamental catalysts for the stock going forward, perhaps related to the boost to demand for their products from the AI large language model war. Companies might scramble to get the required infrastructure to run their algorithms on? Chart wise, the setup is perfect and predicts a steady trend if price stays above $119 where the monthly trend would be invalidated. The daily predicts immediate upside within the next 10 business days. Best of luck! Cheers, Ivan Labrie.
NYSE:ANETLong
by IvanLabrie
ANET: With a Breakout, a Clear Transition to the Advance ZoneArista Networks, Inc. broke its key resistance and entered the advance zone on strong earnings growth. It stayed trapped in the price channel ($100-$140) for more than a year due to the downtrend in stock markets. But now with good volumes and steady growth behind it, it's taken a big step. ANET's revenue grew 49% (TTM) and income 61% (TTM) and is expected to continue its growth momentum. This cloud computing stock is a very good pick over the long term.
NYSE:ANETLong
by starringinvestors
ANET - Resting for a WhileANET is resting for a while in its accumulation zone. This cloud-computing company experienced a boom in 2021 when its price doubled. However, by the start of 2022, it has entered accumulation stage after witnessing a brief failed decline. FUNDAMENTALS OF ANET ANET has impressive fundamentals. Its financial results are better in every quarter than its previous quarter - a key indicator for a multi-bagger company. Its revenue grew 42 % in TTM while its net income saw a rise of 48% in TTM. Company has high margins and negligible debt, making it resilient to deteriorating financial conditions and interest rate hikes. WHEN TO BUY Once ANET is out of accumulation zone with increasing volumes, that's best time to buy it.
NYSE:ANETLong
by starringinvestors
open ai is a nice fun toolpeople have used it to cheat on university exams. people with no coding experience have used it to develop software. people use it to penetration test vulnerabilities in networks. its all cloud based supercomputing. does this mean openai is going to change the world? no. does it mean microsofts cloud computing business is saved? no. does that mean its a good investment? yes. obviously bulls got power bomb suplexed back into the dirt at the end there, but its as if they dont care. as long as were buying the rumor, selling the news, im going to assume theres more rumors, and more news. aquisitions and debt to assets peaked after trumps election, and were rubbing up against corona bottom anchored vwap, and top of regression. if these metrics continue bull, im long, and if we resist and move lower im bear.
NASDAQ:MSFT
by cerealpatterns
Cloud computing: what are the big players telling us?Each earnings season, we become accustomed to certain patterns. One pattern involves the biggest tech companies reporting earnings before many other smaller and medium sized firms. In what we know is a very difficult economic backdrop, it’s important to look for signals that some of the world’s largest companies are giving us. Additionally, since Microsoft Azure, Amazon Web Services, and Google Cloud are three of the world’s largest providers of public cloud infrastructure, it’s possible that these reports contain details about how companies are spending more broadly on technology. Combining the annual revenues of just these businesses (recognising that they are each part of larger companies) we see spending on cloud infrastructure annually in the hundreds of billions of dollars. We believe that there is a difference between these three large public-cloud infrastructure providers and the much greater number of far smaller Software-as-a-Service (SaaS) providers. These three firms, for instance, are a major part of most market capitalisation-weighted benchmark indices. They are at a point in their life cycles where they should exhibit sensitivity to broad, global economic activity and growth expectations. What can they tell us? The most important thing that we think the results of the big public-cloud providers can tell us regards trends in broad-based information technology spending on cloud computing. Eventually, the enterprise market will have ‘moved to the cloud’ and the growth rates of these large players should drop significantly. We are not yet there so, in this type of environment, we really want to see the resilience of cloud spending in the face of a tougher economic backdrop. There haven’t been that many economic slowdowns since the genesis of the cloud business model, and there certainly haven’t been sustained periods of inflation or central bank tightening. What don’t they tell us? The smaller SaaS providers tend to help their customers with much more specific business initiatives. It may be accounting, compliance, cybersecurity, data analysis…the list is becoming endless. These companies are more idiosyncratic, in that their individual results do not translate to broad trends as clearly as the biggest company results would. However, we might see strong spending in cybersecurity, for example, and this may not be as clearly visible in the results of the biggest companies. Our initial sense is that it is important to remember that, in many cases, businesses transitioning to the cloud is done to create efficiency and to accomplish more while investing either less time, less money or less of both. We think that this overall trend will continue, but it likely won’t continue at the rates seen in recent years if the global backdrop is characterised by a deteriorating economic picture. It’s also the case that many cloud-focused companies have seen their share prices drop significantly in 2022. This doesn’t mean that all the risk is ‘priced-in’ by any means, but it does tell us that the valuation risk of the space is lower relative to the much higher valuations seen towards the end of 2021. Microsoft Microsoft is a leader in the cloud space, and it’s important to note that the Azure infrastructure platform is one piece of the overall ‘Intelligent Cloud’ effort. Most attention goes to the year-over-year revenue growth rates, so it is instructive to first ground any discussion in some of the recent quarterly figures, which are shown in year-over-year terms for Azure specifically below1: 30 September 2021: 50% 31 December 2021: 46% 31 March 2022: 46% 30 June 2022: 40% 30 September 2022: 35% It also helps to look at the overall revenue base to help ground any further thoughts about reasonable growth. While the quarterly results do look at more than the pure Azure revenues, broadening the picture to ‘Intelligent Cloud’, we see that Microsoft’s Intelligent Cloud revenue was $16.91 billion as of 30 September 2021, and that this figure increased to $20.33 billion as of 30 September 2022. This is a quarterly figure, and it is beginning to be quite large, so part of the growth rate deceleration that we may be seeing could be attributed to the size and scale of these figures. Analysts are seeing Azure customers very focused on optimising their cloud workloads, which helps them to save money, and it’s also the case that there is evidence that customers are pausing on new workloads. It is reasonable to think that, in an environment of slower economic growth, consumption-based business models like public cloud infrastructure may indicate shifts in customer-behaviour toward more essential workloads2. Amazon Amazon Web Services (AWS) is the leading public cloud infrastructure platform based on market share, often cited as having a figure around 40% of the total. If we consider the year-over-year growth rates from recent quarters3: 30 September 2021: 39%. 31 December 2021: 40% 31 March 2022: 37% 30 June 2022: 33% 30 September 2022: 27% Similar to the case of Microsoft, we are seeing decelerating growth rates. However, if we look to 30 September 2021, the trailing 12-month net sales for AWS was at $57.2 billion, and this same figure as of 30 September 2022 is $76.5 billion. These are getting to be quite large numbers. Also similar to the story with Microsoft, enterprise cloud customers are looking to reduce costs within the AWS ecosystem. Analysts are continuing to note the long-term potential and how this differs from the situation within the shorter-term macroeconomic backdrop4. Alphabet—Google Cloud in focus Google Cloud, within Alphabet, does trail both Microsoft Azure and AWS in terms of market share, but Alphabet as a whole runs a formidable, cash-rich business, so they have been known to make large, splashy deals to gain high-profile cloud customers. If we note the year-over-year growth figures5: 30 September 2021: 45% 31 December 2021: 45% 31 March 2022: 44% 30 June 2022: 36% 30 September 2022: 38% The growth rates are similar to what we noted with Microsoft Azure and AWS, but the dollar figures are much lower. As of 30 September 2021, the quarterly revenue from Google Cloud was reported at $4.99 billion, and then as of 30 September 2022, this figure had grown to $6.87 billion. It is notable that, while Microsoft and Amazon saw quarter-to-quarter decelerations in growth rates, Google Cloud is cited as a bright spot of growth acceleration in Alphabet’s results. However, we note that Alphabet’s core business was certainly not immune to deteriorating economic conditions, and that the revenue figures are growing from a smaller overall base. Conclusion: the economy matters but this is not the year 2000 The primary conclusion that we reach at this point is that economic conditions do matter for cloud computing companies. We have already seen their share price performance for 2022; it is crystal clear that market participants have re-assessed the appropriate valuation multiples for these firms considering higher inflation and higher interest rates. We will be watching closely to see how much revenue growth these companies can maintain as they continue to report earnings for the period ended 30 September 2022. The biggest companies, so far, have reported a range of 27% to 38%. It clearly isn’t the euphoric environment of 2020 any longer, but we don’t think it appropriate to say a ‘tech bubble is bursting’ either. Sources 1 Source: Microsoft’s First Quarter Fiscal Year 2023 Results, 25 October 2022. Revenue figures presented in the generally accepted accounting principles (GAAP) format. 2 Source: Sills, Brad & Adam Bergere. “Expected Azure decel likely temporary, cyclical; model largely derisked.” Bank of America Securities. 26 October 2022. 3 Sources: Amazon’s Quarterly Earnings Conference Call Slides for the specific periods ended: 30 September 2022, 30 June 2022, 31 March 2022, 31 December 2021 and 30 September 2021. The revenue growth figure is taken as the year-over-year growth without foreign exchange adjustment. 4 Source: Post, Justin & Michael McGovern. “Expecting Less this Holiday.” Bank of America Securities. 28 October 2022. 5 Sources: Alphabet’s Quarterly Earnings Announcements which specify the revenues from different business units on a quarterly basis for the periods ended: 30 September 2022, 30 June 2022, 31 March 2022, 31 December 2021 and 30 September 2021. Percentage growth is calculated directly from the figures that Alphabet reports for Google Cloud, all in USD terms.
NASDAQ:EMCLOUD
by aneekaguptaWTE
Cloud Computing continues to exhibit strong growth in 2022When you think about cloud computing companies this year, the most likely starting point will be performance1: - The BVP Nasdaq Emerging Cloud Index, from its high last November to its near-term low in June, fell 60.20%. - This compares to the S&P 500 and Nasdaq 100 Indices, down 21.21% and 31.17% respectively, over the same period2. However, from June 16th to August 22nd this year3: - The BVP Nasdaq Emerging Cloud Index returned 17.56%. - The S&P 500 and Nasdaq 100 Indices returned 13.07% and 15.97% respectively, over the same period4. The bottom line: The dominant force explaining the performance of cloud computing companies has been macroeconomic, meaning that as the US Federal Reserve (Fed) and other central banks pursue more restrictive monetary policies to fight inflation, the valuations of cloud companies have fallen. Similarly, if investors ‘feel’ that inflation is easing in any way—and subsequently central banks may slow the pace of tightening—there has tended to be a strong positive share price response. The BVP Nasdaq Emerging Cloud Index: August 2022 rebalance We mention the BVP Nasdaq Emerging Cloud Index as a measure of the performance of cloud companies because it is designed to offer a precise exposure to their growing revenues by serving enterprise customers. What we see in Figure 15: - The blue line, sloping upward from left to right represents the weight (vertical axis) and the six-month performance (horizonal axis) of initial constituent companies before the August 2022 rebalance. Companies like RingCentral, Asana and Blend Labs faced performance challenges over this period, whereas companies like Paylocity Holding Corp, Box and Qualys tended to see stronger performance. - The grey line shows that the rebalance resets the Index to equal weight. Companies that outperformed see their weights decrease, and companies that underperformed see their weights increased. This leads to a valuation sensibility and risk mitigation every 6-months. - Red dots and company labels indicate companies that will no longer be constituents after the August 2022 rebalance. The primary reason, historically, why companies are deleted is that there is an announced deal, such as an acquisition by a private equity firm. - Green dots and company labels indicate companies that are new constituents and will be added to the index after the August 2022 rebalance. The primary reason companies are added is that they have become accessible in public equity markets. The fundamentals will matter again It would be difficult for us to argue that the main catalyst for the share price performance of cloud companies has to do with fundamentals like revenue growth. As we noted earlier, the main catalyst has been the macroeconomic backdrop. However, company fundamentals are always an important force and will always come back to prominence once macro pressures fade. What we see in Figure 26: - Along the horizontal axis, almost every blue dot is to the right of the 0% boundary, indicating positive year-over-year revenue growth, as per the most recently announced quarterly results. It may be a tough economic environment, but by and large these companies continue to grow revenues. - Along the vertical axis, higher on the chart means higher valuation. Some companies, like Gitlab, Snowflake and SentinelOne are still trading in the range of 25-30.0x Enterprise Value to Sales ratio (EV/Sales). While this may not be ‘inexpensive’, these companies have been growing revenues in the range of 50-100%, year-over-year. If that can be kept up, maybe that premium multiple is warranted. We would note that the majority of the 75 blue dots are below the 10.0x line, however. - The weighted average sales growth for the BVP Nasdaq Emerging Cloud Index is still in the range of 35-40%, where it has been positioned consistency for some time. Is this sustainable? Microsoft Azure, Amazon Web Services and Google Cloud tend to see their, admittedly, very large revenue bases growing year-over-year in this range. The fact that the biggest players seem to, for the moment, be sustaining these rates of growth, tells us that the smaller companies—like those in this index—may be able to sustain growth rates higher than one might see in other sectors. Conclusion: Cloud Companies will continue to deliver exciting results In cloud computing, it’s important to look at all the available signals such that one can gain the most appropriate sense of market conditions. Bessemer Venture Partners has just put out its annual Cloud 100 Benchmarks report for 20227. This report specifically looked at the largest and most dynamic private cloud companies, which provide important signals for the overall health of the business model. In 2022, Bessemer specifically notes that the valuation of private companies may not be the best metric to look at if the goal is to get a sense of the ‘health’ of a given market. For instance, if companies have not raised money recently, they may not have their valuations marked all the way to present market conditions. Bessemer instead focuses on what they call ‘Centaurs.’ While being a ‘Unicorn’ is $1 billion in private market valuation, a Centaur is 100 million in annual recurring revenue. For the 2022 Cloud 100, 70% are already achieving Centaur status and a further 10% more are quite close and could reasonably do it before the year is out. In an environment where the market is focusing much more on results than exciting stories and private funding is harder to come by, proving business success at the Centaur level is indeed important. Sources 1 Source: Bloomberg, with data from 9 November 2021 to 16 June 2022 2 Refers to the S&P 500 and Nasdaq 100 ‘net total return’ indices 3 Source: Bloomberg, with data from 16 June 2022 to 22 August 2022 4 Refers to the S&P 500 and Nasdaq 100 ‘net total return’ indices 5 Source: The 6-month period between rebalances is from 22 February 2022 to 22 August 2022. The performance source is Bloomberg 6 Sources: WisdomTree, Nasdaq and Bloomberg, with data measured as of 22 August 2022. Further details in sourcing are below Figure 2 7 Source: www.bvp.com This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
NASDAQ:CPQTR
by aneekaguptaWTE
Cloud computing: Beyond the fog of macro2022, so far, has been a year of the value style of investing outperforming the growth style, and few megatrends in recent years have been more growth oriented than cloud computing. Big stories and sales growth went from being in favour during 2020 and 2021 to being completely out of favour in an environment of higher inflation and interest rates. However, do we risk painting an entire megatrend with too broad a brush? If most cloud computing companies are trading more based on macroeconomic factors, opportunities can be created because the companies where positive things are happening are being pulled downwards along with everything else. Anyone interested in cloud computing and software-as-a-service (SaaS) businesses would do well to follow Jason Lemkin’s SaaStr blog. Some of the examples that I point out in the text that follows were inspired by his writing, and it’s excellent food for thought in finding positive financial developments in these companies. Zoom video communications It’s possible that the biggest value of Zoom is the fact that they are a global brand that everyone knows. There is even such a thing as ‘Zoom fatigue’—meaning the product is used so much that there is common language to describe using it too much. But, is this just a ‘pandemic darling’ or is this a business that has a significant future outside of the Covid-19 Pandemic? Customer Cohorts are Changing Customers that generate more than $100,000 plus in recurring revenue are the engine for future growth. This group of customers, roughly 2,900 in number, are growing 46% year-over-year. This could be Zoom’s ultimate future, but it will be a journey. Even in 2021, 63% of Zoom’s revenue was still from 10 seat or smaller customers1. Cost Control I was fascinated and even surprised to see that Zoom’s sales and marketing spending is around 25% of revenue, having grown from 20%. The reason for the expansion of spending is to facilitate Zoom’s transition more towards enterprise customers. The typical Software-as-a-Service company is spending something closer to 50% of revenue on sales and marketing, so Zoom is operating at roughly half the scale of the typical SaaS business, at least on the basis of measuring their expenditure this way. This is a big reason why Zoom is able to generate roughly $2 billion of adjusted free cash flow per year. In the current environment, if these stocks start trading less on macroeconomic factors and more on fundamentals, we believe that the capability to transition from revenues to free cash flows to earnings will be prized, and Zoom is doing this2. Multi-product Expansion Zoom has annual recurring revenues of about $4 billion, and the vast majority of this comes from the core product of video communications. However, Zoom’s phone product does have about 3 million users. We can recognise that Zoom attempted to acquire Five9, which didn’t work out, but they are still seeing growth of their phone product. It will just take time for the phone product to get big enough to materially impact the $4 billion in annual recurring revenues. Sprout Social Sprout Social is a company that helps increase the impact of brands, people and companies on social media. Growth Acceleration Consider these growth rates at different levels of annual recurring revenue3: $100 million: 30% growth. $180 million: 34% growth. $240 million: 41% growth. We can recognise that this past behaviour doesn’t guarantee any future growth rates, but it’s at least worth continuing to watch Sprout’s results. If they can maintain this trajectory for a time, when cloud computing stocks trade more on fundamentals and less on macroeconomic factors, performance could be quite interesting. Cost Control As mentioned with Zoom, the typical SaaS company spends something around 50% of annual recurring revenue on sales and market expenses. Sprout is spending about 39%, which is below a key measure of 40%, which has tended to be associated with better performance on free cash flows. Sprout Social is generating 9% free cash flow at $240 million in annual recurring revenue, which is a level that many SaaS don’t see until $500 million or even $1 billion in annual recurring revenue, speaking to a certain degree of efficiency in the business4. Box Box provides a solution that allows for efficient file sharing and data storage. Operating Margins Again, we note that the market today cares far less about the ‘story’ and more about the discipline and the execution. I’ll admit that I had to read the following a few times to make sure that I had it right and I wasn’t making a mistake5: Box had a 1% operating margin in 2020. Box most recently reported an operating margin of 20%. That is an incredible display of discipline, helped by the fact that sales and marketing expenses has been driven down to a low of 28% of annual recurring revenues. Box is approaching a level of free cash flow that is almost 20% of revenue, which is a significant figure for a SaaS company. Conclusion: Remember the Digital Transformation Cloud computing is certainly a high volatility, high risk megatrend, and we recognise that the first half of 2022 has been tough on the basis of share price performance. However, we were recently asked about how these companies might fare in an environment of rising rates and higher inflation. While there is no guarantee that customers don’t cancel subscriptions—and many cloud companies operate on subscription models—we tend to think about why customers are subscribing in the first place. Even before the Covid-19 pandemic there was a push toward digital transformation. Companies were largely doing this to increase efficiencies, make better use of data, and run their businesses in a more optimal way. The present environment makes us think that there could be an even greater value on businesses saving costs and finding efficiencies. To the extent that cloud subscription services can actually help businesses continue operating and save costs, we think this is a very interesting space for consideration. Sources 1 Source: Lemkin, Jason. “5 Interesting Learnings from Zoom at $4.3B in ARR.” SaaStr. 8 June 2022. 2 Source: Lemkin, 8 June 2022. 3 Source: Lemkin, Jason. “5 Interesting Learnings from Sprout Social at $240,000,000 in ARR.” SaaStr. 15 June 2022. 4 Source: Lemkin, 15 June 2022. 5 Source: Lemkin, Jason. “5 Interesting Learnings from Box at $1 Billion in ARR.” SaaStr. 1 June 2022. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
NASDAQ:CPQTR
by aneekaguptaWTE
VMW: Merger Arbitrage !?VMware Intraday - We look to Buy at 110.32 (stop at 100.60) This stock has recently been in the news headlines. Broadcom agreed to buy the company for $61B USD. Trading volume is increasing. We look for a temporary move lower. Bespoke support is located at 110.00. Dip buying offers good risk/reward. Our profit targets will be 139.88 and 150.00 Resistance: 140.00 / 150.00 / 167.00 Support: 110.00 / 92.50 / 85.50 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
VLong
by VantageMarkets
AVCT 1450% Upside Analyst RatingI know, it seems ridiculous, but last year Loop Capital Initiated Coverage on American Virtual Cloud Technologies, Inc. (AVCT) with a Buy rating and a $17.00 price target. Now i am not sure if American Virtual Cloud Technologies, Inc. (AVCT) is such an amazing company to do 14.5X, even though the cloud services will be the essence of the Metaverse, but i think at least a 2X short term is extremely plausible. Looking forward to read your opinion about it!
ALong
by TopgOptions
1
SCUSDT - Reaccumulation is in actionHi Everyone, Keeping this analysis simple and Straightforward. if you look at the history of this chart, It is repeating very similar pattern, that lead me towards the conclusion that this coin is in accumulation phase. As soon as BTC start behaving like a good boy, we might see a PUMP.. This project is also from Web 3 category with very interesting subcategory of cloud storage that make it very bullish. short term targets are mentioned, while long term target is $2 Thanks. Definitely i am not giving any sort of Financial Advice, this TA is for my own entertainment and educational purpose. please like and i welcome all sort of Constructive Criticism as i am new and self studying about Financial Market and TA. Your support will be highly appreciated. Regards
Long
by CryptoCaffiene
Seagate Breaks the DowntrendSeagate Technology has spent the last five months pulling back. But now it may be turning around. The main pattern on today’s chart is the descending trendline that started in May and ran along the peaks of August and September. Notice how STX closed above that line on Friday. Next, the jump followed two weeks of consolidation along the 200-day simple moving average (SMA). A bounce at that level may suggest its longer-term uptrend remains intact. It also occurred near the July 21 low at $78.86. Third, consider why STX jumped last week: strong quarterly results and guidance. The hard-drive maker is enjoying a surge of demand from data-center customers. Its relatively low multiple (about 10 times forward earnings) could also provide some cushion against rising interest rates. Finally, notice how the 8-day exponential moving average (EMA) is on the verge of rising above the 21-day EMA. STX may pause around its current level, but a cross of the 8-day EMA above the 21-day could signal shorter-term momentum has grown more positive. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
NASDAQ:STXLong
by TradeStation
2
Stunner: Oracle Breaks Out as Peers LanguishSoftware companies have lagged this year as investors focus on cyclicals like energy and financials. But one unexpected name is breaking out: Oracle. As covered previously, strong earnings lifted ORCL to new highs in December. It then pulled back to old resistance and bounced. This week, its shares are closing above their previous all-time highs. Two technical patterns stand out today. First, notice how ORCL broke above $64 on February 22. The stock barely pulled back in subsequent sessions, even as the broader S&P 500 dove to a three-week low. Second is ORCL’s relative strength compared to the broader technology sector. Both of these trends are signs of accumulation. One positive catalyst is ORCL’s improving momentum in cloud-computing, which prompted analysts to raise price targets after last quarter. Now buyers are re-engaging with another set of numbers about two weeks away. The company’s lower valuations may also provide some shelter against higher interest rates. ORCL trades for just 14 times forward earnings and 5 times revenue. Other big names like Salesforce.com and Adobe (which have gone half a year without hitting new highs) trade for at least 3 times more. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
NYSE:ORCLLong
by TradeStation
RLC back in the buy zone. Future of cloud computing. Fundamentals: This is one of the promising projects which is building a decentralized cloud computing platform where computation can be aggregated from sources all across the globe. They are directly competing with the incumbents AWS, Google, IBM, Microsoft etc. Currently the market cap sits around $65 million which is a steal. The team is made up of several PhDs and experts in the cloud computing field. They are also working on decentralized oracles which will compete with Chainlink, Band etc. In addition, they have become a member of the Intel AI ecosystem giving it more credibility with the enterprise customers. The cloud computing market as a whole is growing exponentially and is predicted to surpass $500 billion+ in 2022 (kinsta.com). Even capturing a small percentage of this market will propel RLC to a multi billion dollar market cap. Technicals: RSI: Heavily oversold OBV: Accumulation has been going on since the last 2 bull cycles This is a long term hold. Expecting the marketcap to exceed $1 billion + in the coming years. Note: This is not financial advise. Please do your own research.
Long
by CryptoPaily
iExec RLCGiant head and shoulders forming on the higher timeframe? Or do you prefer the cup and handle? as shown in my previous analysis here: To me these technical indicators show the growing probability of the RLC token prize going (MUCH) higher in the beginning of next year. (Right around the launch of the regulated and compliant environment). Check out there website here: iex.ec And more info on the eRLC token here: iex.ec iExec must be one of the most underappreciated crypto-projects in existence... Thanks for looking! Sven
BINANCE:RLCUSDLong
by svenso