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☆ Wall Street worries about revenue 'round-tripping,' after big AI deals by cloud giants including Amazon and Google
▼ + stars: | 2024-05-22 | by ( Eugene Kim | ) www.businessinsider.com time to read: +3 min

These days, this may happen when a big tech company invests in an AI startup, and then that startup buys cloud and AI services from the big tech company. These arrangements are called "round tripping" because the money invested comes right back in the form of cloud spending. When Amazon Web Services invested $4 billion in Anthropic, the AI startup agreed to use AWS as its "primary cloud provider." In recent years, cloud spending growth has slowed as some customers try to save money in the midst of a lackluster economy with high inflation. An Amazon spokesperson declined to say whether AWS revenue numbers include cloud spending by Anthropic or not.

Persons: —, what's, Rishi Jaluria, GCP, Jaluria Organizations: Service, Business, Amazon Web Services, Google, Microsoft, OpenAI, Oracle, RBC Capital, RBC, Amazon Locations: Anthropic

☆ Palantir CEO says its unconventional boot camps are drawing crowds and driving sales: 'It's like a rock concert'
▼ + stars: | 2024-04-23 | by ( Sarah Jackson | ) www.businessinsider.com time to read: +2 min

It's been putting on boot camps to attract customers, per Bloomberg. CEO Alex Karp has likened them to "a rock concert;" they've included perks like racetrack drives. The data mining company, cofounded by PayPal Mafia member Peter Thiel, has been holding software boot camps to recruit new customers, Bloomberg reported Tuesday. The company put on over 500 boot camps last year and expects to average five camps a day globally this year, according to Bloomberg. It's like, yeah, yeah, if you know somebody, we can get you backstage."

Persons: Palantir, It's, Alex Karp, —, Peter Thiel, Morningstar, Malik Ahmed Khan, Rishi Jaluria Organizations: Bloomberg, Service, PayPal Mafia, AIP, RBC Capital Markets Locations: Pontiac , Michigan

☆ Wall Street is obsessed with the growing Salesforce rival HubSpot, whether or not Google makes an offer to buy it
▼ + stars: | 2024-04-05 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +4 min

A deal like this would allow Google to better compete with Salesforce in customer relationship management software, and it makes sense strategically as Google looks to grow its share in the cloud market. Deal or no deal, all the talk has made one thing clear: Wall Street is kind of obsessed with HubSpot. "With Salesforce, you need a Salesforce administrator," said Rishi Jaluria, managing director of software equity research at RBC Capital Markets. If Google does make an offer to acquire HubSpot, it will be up to HubSpot whether to accept — and it may not accept, Havemeyer wrote in the note. HubSpot has also disclosed that it is a Google Workspace customer and uses Google Cloud as its international cloud.

Persons: —, HubSpot, Salesforce, Rishi Jaluria, William Blair, cohead Arjun Bhatia, Fred Havemeyer, Havemeyer Organizations: Service, Reuters, Google, Business, Wall Street, Big Tech, RBC Capital Markets, HubSpot, Macquarie Locations: HubSpot

☆ DocuSign, Zoom, and Twilio thrived in the pandemic-era stock market. In 2024, they're some of cloud software's most likely M&A targets.
▼ + stars: | 2024-01-19 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +2 min

With the promise of generative AI fueling investment in technology, industry experts expect 2024 to be an active year for cloud software M&A. The market is right for buyers and sellers, as companies like Salesforce and Nvidia enter 2024 with cash on hand and mature startups face a slowed venture market. "There's so much demand for amazing talent in AI," Somasegar said. Deals in 2024 will likely be at smaller valuations, Jaluria noted. Jaluria expects that several companies that flourished during the pandemic — only to lose momentum with the rise in return-to-office mandates — are likely candidates for M&A in 2024.

Persons: Somasegar, Rishi Jaluria, Jaluria, Jaluria's Organizations: Business, Nvidia, Madrona Venture Group, RBC Capital Markets, Activision Locations: Seattle, Figma

☆ Salesforce markets itself as an AI company customers can trust. Customers aren't buying it yet.
▼ + stars: | 2023-12-18 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +5 min

Salesforce has moved slowly on AI, RBC Capital Markets managing director Rishi Jaluria told Insider — at least that's what the company's partners and customers told him. One said they were encouraging customers to start first with Einstein, the original AI product Salesforce launched in 2016, before adding new generative-AI services to their bills. The question was the first of many moments during the conference when a Salesforce executive brought up trust and safety when talking about generative AI. Despite that, Salesforce continues to invest in other companies via its venture arm, which includes a $500 million Generative AI fund. Jaluria said that with the exception of Microsoft, he doesn't expect software companies to see meaningful revenue gains from generative AI until at least 2025.

Persons: Salesforce, Rishi Jaluria, —, Jaluria, they've, Einstein, Matthew McConaughey, pensively, Patrick Stokes, Salesforce's, Stokes, it's, There's, John Somorjai, McKinsey's, Somorjai, Ellen Thomas Organizations: Company, Business, RBC Capital Markets, World, Salesforce Ventures, Microsoft Locations: New York, ethomas@insider.com

☆ Zoom lifts annual results forecast as AI features boost demand
▼ + stars: | 2023-11-20 | by ( Samrhitha A | ) www.reuters.com time to read: +2 min

Zoom now expects annual adjusted profit per share between $4.93 and $4.95, higher than its prior forecast of $4.63 and $4.67. The company lifted its full-year revenue forecast to between $4.506 billion and $4.511 billion, from $4.485 billion to $4.495 billion earlier. The company's quarterly free cash flow grew 66.2% to $453.2 million, and Zoom expects $1.34 billion to $1.35 billion for the full year. The Phone segment grew to roughly 7 million paid seats while Contact Center reached about 700 customers as of quarter-end. For the third quarter, revenue grew 3.2% to $1.14 billion, slightly above estimates.

Persons: Dado Ruvic, Webex, Eric Yuan, Rishi Jaluria, Samrhitha, Devika Organizations: REUTERS, Communications, RBC, Contact, Thomson Locations: Bengaluru

☆ Microsoft's relationship with OpenAI is 'absolutely critical': RBC Capital Markets
▼ + stars: | 2023-11-20 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMicrosoft's relationship with OpenAI is 'absolutely critical': RBC Capital MarketsRishi Jaluria discusses the importance of OpenAI to Microsoft, adding the absence of Sam Altman's leadership and vision will affect OpenAI's future.

Persons: OpenAI, Jaluria, Sam Altman's Organizations: RBC, Microsoft

☆ The generative-AI hype hasn't translated to cloud sales yet, as customers don't know if they should jump in. Microsoft is the one exception.
▼ + stars: | 2023-10-27 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +4 min

Rates of cloud-computing sales growth slowed to historical lows this year as customers slashed IT budgets. Microsoft and Google, the next two biggest American cloud providers, also saw rates of cloud-revenue growth slow this year. Microsoft's Azure and other cloud services saw revenue growth of 29%, down from 35% this time last year. Google this week reported a 22% year-over-year increase in cloud revenue the past quarter, down from 28% the previous quarter. The company attributed this to customer "optimization," or looking for ways to save money on cloud services.

Persons: Karl Keirstead, they're, they'd, Rishi Jaluria, Andy Jassy, Jassy, Ellen Thomas Organizations: Microsoft, Web Services, Google, Enterprises, UBS, Wall, RBC Capital Markets, Amazon Locations: Ukraine, Israel, ethomas@insider.com

☆ The generative AI hype hasn't translated to cloud sales yet, as customers don't know if they should jump in. Microsoft is the one exception.
▼ + stars: | 2023-10-27 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +4 min

Microsoft and Google, the next two biggest American cloud providers, also saw cloud revenue growth rates slow this year. Microsoft Azure and other cloud services saw revenue growth of 29%, down from 35% this time last year. Wall Street has been hopeful that generative AI will provide a much-needed revenue boost for the big three cloud providers. The one exception is Microsoft, which has spent billions investing in generative AI startup OpenAI, maker of the chatbot ChatGPT. Amazon CEO Andy Jassy stressed on the earnings call Thursday that generative AI is still in its "early days."

Persons: Karl Keirstead, they're, they'd, Rishi Jaluria, Andy Jassy, Jassy, Ellen Thomas Organizations: Microsoft, Web Services, Google, UBS, Enterprises, Wall, RBC Capital Markets, Amazon Locations: Ukraine, Israel, ethomas@insider.com

While enterprise demand stabilized for legacy products, that has not extended to cloud computing, the mainstay for Microsoft and Amazon. Alphabet and Meta are set to benefit from an uptick in digital ad sales ahead of the holiday-shopping season. Last month, media research and investment firm Magna raised its forecast for U.S. ad spending growth to 5.2%, from 4.2%, for calendar 2023. Reuters GraphicsAmazon, however, is expected to be shielded by strong retail sales, thanks to a strong labor market. Meta reports on Wednesday and Apple will round off Big Tech earnings with results next week, on Nov. 2.

Persons: Gil Luria, It's, Rishi Jaluria, Yuvraj Malik, Zaheer Kachwala, Sayantani Ghosh, Savio D'Souza Organizations: Apple, Facebook, Google, Microsoft, D.A, RBC Capital, Nvidia, RBC, Google Services, Magna, Amazon Web Services, Reuters Graphics, Big Tech, Thomson Locations: Davidson, Bengaluru

☆ After Salesforce hiked its product prices by an average of 9%, some unhappy customers are considering switching to Microsoft or HubSpot
▼ + stars: | 2023-08-30 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +7 min

Already, consultants see Salesforce customers scrambling to address these price hikes. Jon Winsett, CEO and managing partner at Atlanta-based IT spending advisory NPI Financial, said his firm immediately alerted all its clients to the price increase news. "We were working with one of our accounts right as the price increase was announced, and they were gobsmacked," Winsett said. Customer relationship management software company HubSpot uses customer self-service to sell its software — a stark contrast from Salesforce's sales-driven culture. You don't need a full-time Salesforce admin when you're a HubSpot customer.

Persons: Salesforce, Marc Benioff, Adam Mansfield, — they're, HubSpot, Bernstein, Mark Moerdler, Moerdler, Jon Winsett, Winsett, Microsoft Mansfield, Mansfield, Satya Nadella Justin Sullivan, OpenAI, I've, we're, you've, that's, Yamini Rangan, HubSpot Matt Winkelmeyer, Rishi Jaluria, he'd, Jaluria Organizations: Wall Street, Microsoft, Cloud, Industries, Management, RBC Capital, Salesforce Locations: Salesforce, Atlanta, ChatGPT

☆ Palantir shares should be 'substantially lower' as it is not truly a generative AI company: Analyst
▼ + stars: | 2023-08-08 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailPalantir shares should be 'substantially lower' as it is not truly a generative AI company: AnalystRishi Jaluria of RBC Capital Markets says that Palantir is not adding enough value to justify its positioning as a leader in the generative AI space.

Persons: Rishi, Palantir Organizations: RBC Capital Markets

☆ Akamai Technologies forecasts upbeat third-quarter revenue, profit
▼ + stars: | 2023-08-08 | by ( ) www.reuters.com time to read: +2 min

The Cambridge, Massachusetts-based company forecasts revenue to be between $937 million and $952 million for the quarter ending Sept. 30, compared with analysts' average estimate of $931 million, according to Refinitiv data. The company expects adjusted profit per share for the third quarter to be between $1.48 and $1.52, while analysts estimated $1.41. Akamai also raised its full-year revenue forecast to between $3.77 billion and $3.80 billion, compared with its prior projection of $3.74 billion to $3.79 billion. Security and compute revenue, which formed 59% of the company's total revenue in the quarter, grew 14% over the year earlier, the company said. Excluding items, the company's profit per share was $1.49, compared with analysts' expectations of $1.41.

Persons: Akamai, Rishi Jaluria, Jaluria, Zaheer Kachwala, Jaspreet Singh, Shilpi Majumdar Organizations: Akamai Technologies, Wall, RBC Capital Markets, U.S . Department of Labor, Census Bureau, Department of Defense, eBay, Electronic Arts, Thomson Locations: Cambridge , Massachusetts, Bengaluru

Both Amazon and Alphabet will likely report their lowest-ever growth for the cloud computing business at 9.8% and 24.4%, respectively, according to analysts polled by Refinitiv. Meanwhile Microsoft Intelligent Cloud, home to Azure, is expected to grow at 13.7%, the slowest rate since 2017. The digital ad market recovery will also aid Alphabet, whose Google Search has so far avoided any meaningful market share loss to Microsoft's AI-powered Bing. Alphabet is expected to report 4.5% revenue growth in the April-June period, its best in three quarters. Microsoft and Alphabet will report quarterly results on July 25, Meta on July 26 and Amazon on Aug. 3.

Persons: Lucy Nicholson, Kingsley Crane, Rishi Jaluria, Jaluria, Bernstein, Yuvraj Malik, Aditya Soni, Shounak Dasgupta Organizations: Los Angeles , California U.S, REUTERS, Microsoft, Google, Refinitiv, RBC Capital, Facebook, Meta, BofA Global Research, Thomson Locations: Los Angeles , California, Bengaluru

The new generative AI platform was launched two weeks ago and works on the same technology that's behind ChatGPT. The first iteration of the AI platform will be made available to some customers this month, Palantir CEO Alexander Karp said, adding the new offering can assist militaries in targeting enemies. Palantir's first-quarter revenue rose 18% to $525.2 million and adjusted profit stood at 5 cents per share, both above estimates. Palantir continues to tighten its cloud spending and is investing in focus areas like AI, said finance chief David Glazer. The company forecast second-quarter revenue of $528 million and $532 million, below estimates of $536.2 million, per Refinitiv data.

May 8 (Reuters) - Data analytics software maker Palantir Technologies (PLTR.N) said on Monday it expects to turn a profit every quarter in 2023 weeks after launching its new artificial intelligence platform, sending its shares up about 28% in extended trading. Palantir's new generative AI platform works on the same technology that's behind ChatGPT. The interest in the new offering has been "unlike anything we have seen", CEO Alexander Karp said in a letter to shareholders, adding the AI platform can assist militaries in targeting enemies. The company forecast second-quarter revenue in the range of $528 million and $532 million, below estimates of $536.2 million, per Refinitiv data. Palantir continues to tighten its cloud spending and is investing in focus areas like AI, said Glazer.

☆ Amazon is the growth laggard of the cloud industry now
▼ + stars: | 2023-04-28 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +4 min

Amazon said cloud revenue trended down by 500 basis points in April, suggesting year-over-year growth of 11%. The three largest cloud companies reported results in recent days and the growth picture for Amazon Web Services is, well, cloudy. Microsoft's Azure cloud unit grew sales by 31% year over year in the first quarter, while Google Cloud reported a 28% increase. So that suggests a year-over-year growth rate of just 11% for the early part of the second quarter. AWS is still the largest cloud provider, but if Microsoft continues to outgrow Amazon every quarter, the gap will narrow.

☆ Microsoft's bet on AI is still in its early days. But there are signs it's already paying off.
▼ + stars: | 2023-04-26 | by ( Paayal Zaveri | ) www.businessinsider.com time to read: +3 min

Microsoft's partnership with OpenAI has lead to a new wave of innovation in artificial intelligence. There are already early signs that the Microsoft-OpenAI partnership is paying off, analysts say. Analysts say there is still work to be done, but "Microsoft is leading this tech AI arms race." Wall Street analysts took that as a sign that Microsoft's big bet on AI is already leading to financial gains. Ultimately, Wedbush analyst Dan Ives said, "the AI story is still in the first inning," but, he said, "Microsoft is leading this tech AI arms race."

☆ Microsoft should pay whatever it costs to replace Google on Samsung phones
▼ + stars: | 2023-04-19 | by ( Paayal Zaveri | ) www.businessinsider.com time to read: +5 min

Samsung is reportedly looking to replace Google Search with Microsoft's Bing as the default search engine on its phones. If Samsung follows through, Microsoft should pay whatever it takes to make it happen, analysts said. The fact that Samsung is even considering changing its default search engine presents a rare moment of weakness for Google, especially on smartphones. A vast majority of smartphones have Google set as their default search engine, Insider previously reported. Investing big to entrench Samsung as a partner now could pay dividends for Microsoft later, the experts said.

☆ Potential regulator challenges to Big Tech M&A may have far-reaching consequences for the tech ecosystem
▼ + stars: | 2023-03-30 | by ( Paayal Zaveri | April Joyner | ) www.businessinsider.com time to read: +6 min

M&A deals involving large tech companies may get harder as US regulators ramp up scrutiny. If regulators increase scrutiny, it could deter other large tech companies from buying startups. More challenges to proposed tech M&A deals may also mean that the pool of potential acquirers shrinks. Of course, there are cases where a large tech company seeks to buy out a smaller, more innovative competitor because it is scared of getting displaced. "There has to be the hope and dream of selling to a larger tech company some day," Sherman said.

☆ RBC: Buy these 17 future AI winners as the technology begins to transform the world
▼ + stars: | 2023-03-26 | by ( Marley Jay | ) www.businessinsider.com time to read: +3 min

RBC says that AI is one of the most transformative developments in tech in the last 20 years. The firm's tech analysts explained which stocks they think will benefit the most from generative AI. They added that in many cases, the "rising tide" of AI will benefit broad swaths of the market. But it's not just the established tech titans that can profit from the advent of AI technology. Those companies are below, along with their tickers and commentary about each provided by the RBC analysts.

☆ Microsoft unveils AI office Copilot in fast-moving race with Google
▼ + stars: | 2023-03-16 | by ( Jeffrey Dastin | ) www.reuters.com time to read: +5 min

The technology company previewed a new AI "Copilot" for Microsoft 365, its product suite that includes Word documents, Excel spreadsheets, PowerPoint presentations and Outlook emails. This partly underpins Microsoft's Copilot features, along with an older GPT-3.5 model, business and application data, Microsoft said. Microsoft Word app is seen on the smartphone placed on the keyboard in this illustration taken, July 26, 2021. Similar to live notes that Google showed reporters this week, Microsoft said its Copilot can summarize virtual meetings as they happen in its Teams collaboration software. Friedman pointed to Microsoft's business chat experience as the biggest development on Thursday because it can handle tasks across applications.

☆ Salesforce faces an underappreciated risk: Platform customers jumping ship like Veeva
▼ + stars: | 2023-03-04 | by ( Jordan Novet | ) www.cnbc.com time to read: +4 min

Veeva built its core software on top of Salesforce's app-development platform, but that will be coming to an end in 2025. Peter Gassner, Veeva's founder and CEO, ran the Salesforce platform before starting Veeva in 2007. "Peter has been an outstanding CEO," Benioff was quoted as saying in 2017, as the two companies deepened their partnership. The agreement between the companies holds that Veeva is on the hook to pay Salesforce as Veeva customers use Salesforce's platform — and costs have risen as more people have come to rely on Veeva. But it has grown into a profitable publicly traded software company with $2 billion in annual revenue and a $28 billion market capitalization.

☆ Even at its weirdest, most unhinged moments, Bing's chatbot is making Microsoft relevant again
▼ + stars: | 2023-03-01 | by ( Alex Kantrowitz | Big Technology | ) www.businessinsider.com time to read: +6 min

Screenshots of a maniacal, unhinged Bing chatbot have flooded the internet this week, showing the bot condescending, gaslighting, and trying to steal husbands. Even in its weirdest moments, Bing's chatbot has brought new relevance to Microsoft and its search division. "The fact that people are even writing about Microsoft Bing at all is a win," one Microsoft employee told me this week. Now, interest in Bing is soaringThe Bing app set its daily download record over the weekend, according to Apptopia. (Upon joining the waitlist for Bing's chatbot, Microsoft encourages downloading the app to get earlier access.)

☆ There are growing expectations that Salesforce is readying a succession plan to appease activist investors. 'There's not a lot of people sitting on the bench,' one analyst said.
▼ + stars: | 2023-03-01 | by ( Ellen Thomas | Ashley Stewart | ) www.businessinsider.com time to read: +8 min

Analyst said any succession plan would be about giving investors "comfort" about the future. Company insiders, former employees and Wall Street analysts increasingly expect Salesforce to put a succession plan in place soon. 'If he's willing to work with the activists, then he can stay CEO'Analysts think that if a succession plan is announced soon, it won't include Benioff's immediate exit. "Benioff is Salesforce and Salesforce is Benioff," said Dan Ives, an analyst at Wedbush Securities. Bret Taylor, former Salesforce executive SalesforceTaylor's departure in late November left Salesforce with a limited bench of potential successors.

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