Microsoft and Coca-Cola have entered into a five-year partnership valued at $1.1 billion, significantly expanding Coca-Cola’s use of Microsoft’s cloud computing and artificial intelligence (AI) services. This deal marks a significant investment in Coca-Cola’s digital transformation strategy and highlights the growing adoption of AI in the beverage industry.
Despite Broadcom’s revised cloud licensing practices, critics argue that underlying concerns, such as price increases, unfair terms, and product bundling, remain unresolved. The company maintains it offers more customer choice, while critics urge antitrust regulators to investigate. Amidst these developments, Oppenheimer analyst Rick Schafer remains optimistic, citing Broadcom’s strong position in the semiconductor industry and potential benefits from growing demand for data center artificial intelligence.
Forbes Cloud 100 nominations are now open until May 7, 2024. Companies who believe they deserve a place among cloud’s elite are encouraged to apply. The list recognizes the world’s strongest privately-held cloud computing companies, and graduates have become household names like Dropbox, Snowflake, and Zoom. After a period of market reshuffling, the Cloud 100 market is starting to rebound, with companies like Klaviyo going public and Rubrik preparing to follow suit. The average company on last year’s list employed 1,500 people and raised over $800 million in funding, with valuations reaching $6.9 billion. Valuations are now experiencing a turnaround, aided by the rise of artificial intelligence in enterprises. Many newcomers to the 2023 Cloud 100 were AI software vendors, and this trend is expected to continue. The Cloud 100 is a quantitative and qualitative list that evaluates companies based on financial data, people and culture, and market leadership. Forbes publishes the full list in August, along with company profiles, video content, and in-depth coverage. For more information and to apply, visit thecloud100.com.
SAP SE (ETR: SAPG) kicked off 2024 with a strong performance, showcasing significant growth in cloud revenue and backlog, alongside a healthy increase in operating profit. The company’s cloud revenue climbed by 25% to EUR 3.9 billion, while the current cloud backlog expanded by 28% to a record EUR 14.2 billion. Operating profit rose by 19% to EUR 1.5 billion, reflecting the company’s focus on cloud and AI-driven growth across various regions.
SAP’s Q1 FY24 earnings showcase continued progress in its cloud migration and business pivot to AI. Cloud revenues surged 25% year-over-year, with SaaS/PaaS sub-segments leading the way. However, the company’s stock appears fully valued at current levels, offering limited upside potential. SAP’s transformation towards a more cloud-focused model remains on track, but customer adoption of its cloud offerings and the impact of ongoing restructuring expenses warrant further monitoring.
SAP reported weaker-than-expected fiscal first-quarter results due to its ongoing transformation efforts aimed at leveraging AI. Although cloud revenue increased by 24%, earnings per share and revenue missed analyst forecasts. The company maintained its 2024 outlook and announced a 7% increase in dividends.
Microsoft is set to release its fiscal Q3 2024 earnings after market close on Thursday. Analysts predict earnings per share of $2.83 and revenue of $60.769 billion, indicating year-over-year growth of 15.1% and 15.98%, respectively. Goldman Sachs analysts are optimistic about Microsoft’s ability to scale Gen-AI revenue, drive Azure growth, and continue its earnings outperformance. The company’s 12-month average price target is $478, suggesting a potential 18% stock upside.
Analysts at Jefferies and MoffettNathanson remain bullish on Amazon, citing factors such as strong advertising revenue growth, cost leverage, and margin expansion. Despite the challenges faced by its 1P business in the past year, analysts anticipate a recovery in 2024, leading to significant profit improvement.
Salesforce’s stock rose on Monday following a report that it is in talks to acquire Informatica, a cloud data management company. Informatica would be Salesforce’s largest acquisition since it purchased Slack in 2021. The potential deal comes as Salesforce faces competition from Google, which is also targeting enterprise customers.
