Cloud providers in AI, data named 'top picks' as earnings approach: Oppenheimer
Jul. 21, 2024 8:00 AM ET
By: Brandon Evans, SA News Editor
 Gary Yeowell
Microsoft (NASDAQ: MSFT), Cloudflare (NYSE: NET) and C3.ai (NYSE: AI) stand as "Top Picks" heading into earnings season according to Oppenheimer in the investment bank's cloud preview.
"All three enable AI infrastructure/data where enterprises are increasing spending and accelerating cloud migration," said Oppenheimer analyst Timothy Horan, in a detailed investor note. "Separately, hyperscalers are in a battle to create the best AI models. In turn, this drives shortages of AI infrastructure and high CapEx spending and solid cloud growth."
To fund this, companies are cutting back on legacy IT and application spending. Enterprises are also purchasing more hyperscaler bundles, which include features such as cybersecurity, communication and networking.
"MSFT is becoming the dominant AI enterprise platform, the key number is Azure growth, we are at 31% and expect a 31% guide," Horan noted. "NET is setting up to be the dominant edge platform, and will likely beat by 100bps and guide up by 200bps for the year. C3.ai is enabling enterprise AI monetization. All three have great tools to help enterprises with security and to store and manage data, all with recent major product improvements."
Investors will also focus on Google ( GOOG)( GOOGL) Cloud and AWS ( AMZN).
"Success with their AI endeavors versus MSFT will be the focus," Horan said. "We are also looking for ancillary AI impacts on cloud adoption, data management, bundling, security sales, and any signs of increased optimizations."
"Both Google and Amazon made aggressive moves to poach talent and customers as they play catchup to Microsoft and OpenAI in generative-AI," he added.
Google's quarterly results are slated for July 23 after markets close. Estimates call for earnings per share of $1.84 on revenue of $84.29B.
Microsoft plans to release it quarterly financial results on July 30, after markets close. Analysts expect earnings per share of $2.93 on revenue of $64.37B.
Amazon's results are scheduled for post-market on Aug. 1. Analysts' estimates call for earnings per share of $1.01 on earnings of $148.53B.
Cloudflare's results are slated for release after markets close on Aug. 1. Estimates call for earnings per share of $0.14 on revenue of $394.49M.
Meanwhile, C3.ai's quarterly report is not expected until Aug. 30. Estimates anticipate a loss per share of $0.13 on revenue of $86.94M. |
