PLTR - Microsoft AWS Google may benefit as cloud spending showing 'pockets of upticks'

2023-06-26 07:27:45 ET

Microsoft ( NASDAQ: MSFT ), Amazon ( NASDAQ: AMZN ) and Google ( NASDAQ: GOOG ) ( NASDAQ: GOOGL ) could be beneficiaries as investment firm Wedbush Securities said recent checks showed "pockets of upticks" in cloud spending.

"Based on our recent checks over the last few weeks enterprise spending is holding up and showing some pockets of upticks on cloud spending (MSFT, AWS, Google) for [the second-quarter] that emboldens our thesis Street numbers for the tech sector will move higher from these levels into 2024," analyst Dan Ives wrote in an investor note.

Of the trio, Ives believes that Microsoft ( MSFT ) may be the best positioned to gain market share in the cloud and potentially expand its total addressable market by 35% to 40% in the coming years, as the advancements in artificial intelligence reflect "an immense monetization opportunity."

Looking at technology as a whole, Ives said he continues to believe that technology stocks will be up another 12% to 15% in the second-half of this year, led by software and semiconductor stocks as AI has "changed the tech world" and investor sentiment is looking at AI as an "internet moment."

The analyst also noted that AI-related spending could account for 8% to 10% of IT budgets in 2024, up from roughly 1% this year.

Beneficiaries of the trend include the aforementioned trio, as well as as Oracle ( ORCL ), Salesforce ( CRM ), Palantir ( PLTR ), MongoDB ( MDB ), Apple ( AAPL ), IBM ( IBM ), Meta ( META ), Adobe ( ADBE ), Snowflake ( SNOW ) and C3.ai ( AI ), Ives explained.

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