Microsoft,
Amazon.com
and
Alphabet
should all deliver solid cloud results in their upcoming earnings as cloud spending across businesses has stabilized, says one Wedbush analyst.
For cloud businesses,
Microsoft
(ticker: MSFT) has Microsoft Azure,
Amazon
(AMZN) has Amazon Web Services, and
Alphabet
(GOOGL) has Google Cloud Platform. Wedbush analyst Dan Ives wrote in a research note that he expects Microsoft , Amazon and Alphabet to report cloud results for their upcoming earnings that either meet or beat Wall Street expectations.
“Large cap tech and sub-sectors such as cloud and cyber security are seeing
much more resilient growth than the Street had anticipated,” Ives wrote. “While budgets are under pressure across the board, enterprises have green lighted projects and deployments in 2023 with many budgets now in place for the remainder of the year.”
Tech earnings are coming soon. Alphabet reports earnings on April 25, while Microsoft and Amazon report on April 27. IT spending results are a concern as customers have tightened their budgets over the last few quarters. Market research firm IDC trimmed its 2023 enterprise spending forecast for the fifth month in a row last week as it said technology investments continued to show the impact of a weakening economy.
However, IDC said that cloud spending is showing signs of resilience, supporting Ives’ belief that cloud results for the tech giants could come in strong.
“Service provider spending is still weakening from last year’s highs as the industry adjusts to slower post-Covid growth, but planned investments by cloud and hyperscale providers have broadly held up since last month,” the report said. “Strong demand for cloud services continues to drive growth despite inflationary pressures but non-cloud spending is set to decline.”
Microsoft, Amazon and Alphabet shares all have jumped about 20% this year.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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