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Monday, July 22, 2024

Wall Street: Software shares hit this week

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There is the impact of artificial intelligence, which forces businesses to redefine priorities

Wall Street: πγμσμεοεσ αιειναυτν εβομδα /></p>
<p>Salesforce executives told investors that deals are shrinking or being delayed. Dell said its profit margin is shrinking. Okta highlighted the macroeconomic challenges. And Veeva's CEO said in his company's earnings call that genetic AI was a “competitive priority” for customers.</p>
<p>Add it all up, and we're in for a tough week for software and business technology.</p>
<p>Shares of Salesforce fell nearly 20% on Thursday, the biggest drop since 2004, after the cloud software vendor reported weaker-than-expected revenue and issued disappointing forecasts. CEO Marc Benioff said Salesforce grew quickly in the Covid era as companies rushed to buy products for remote work. Then customers had to integrate all the new technology and ultimately streamline.</p>
<p>“Every business software company has in some way adapted” since the pandemic hit, Benioff said in the results briefing. of his company. Businesses that have announced results lately “are all essentially saying the same thing in different ways.”</p>
<p>Software makers MongoDB, SentinelOne, UiPath and Veeva cut their full-year revenue forecasts this week.</p>
<p>The WisdomTree Cloud Computing Fund, an exchange-traded fund that tracks cloud stocks, slipped 5% this week on the week, the biggest drop since January. Paycom, GitLab, Confluent, Snowflake and ServiceNow lost at least 10% of their value.</p>
<p>Dell, which sells computers and data center hardware to businesses, raised its full-year forecast on Thursday and said the backlog for AI servers had risen to $3.8 billion from $2.9 billion previously from three months. But the growing percentage of these servers in the product mix, along with higher input costs, will cause the company's gross margin to shrink by 150 basis points for the year.</p>
<p>Dell shares slid 13% for the week after hitting new highs. The company has been seen as a beneficiary of the genAI wave as businesses ramp up hardware purchases. Expectations were “elevated,” Barclays analysts wrote in commenting on the results.</p>
<p>Okta's share price fell nearly 9% for the week. Analysts cited a weaker-than-expected subscription backlog. The company said economic conditions are hurting the identity software maker's ability to sign up new customers and convince existing ones to expand markets.</p>
<p>“Macro headwinds remain,” the chief financial officer said. Okta's Brett Tighe at the company's results briefing to investors.</p>
<p>A measure of inflation this week was slightly higher than expected. US central bankers are keeping the key interest rate steady, which is at a 23-year high.</p>
<p>At UiPath, an automation software developer, the pace of business slowed in late March and April, partly because of the economy, co-founder Daniel Dines told analysts on Wednesday. Customers were also becoming more reluctant to commit to multiyear deals, said Dines, who replaces former Google executive Rob Enslin as CEO on June 1, a few months after he stepped down as co-CEO.</p>
<p> < p>Cybersecurity software vendor SentinelOne is seeing a similar trend.</p>
<p>“There's no question that purchasing habits are changing,” SentinelOne CEO Tomer Weingarten told CNBC on Friday, adding that “the way which customers rate the software' also changes. His company's share price fell 22% for the week.</p>
<p>Then there's the impact of AI, which is forcing businesses to redefine priorities.</p>
<p>Veeva CEO Peter Gassner cited “disruption in large enterprises as they work out their AI plans ». Veeva, which sells life sciences software, lost nearly 15% of its value this week on concerns about spending in the second half of the year.</p>
<p>Gassner said on the earnings call that the genAI is a 'competitive priority' for Veeva customers.</p>
<p>The news wasn't bad across the board. Zscaler stock jumped 8.5% on Friday after the security software provider beat expectations for the quarter and raised full-year guidance.</p>
<p>“We expect demand to remain strong, as an increasing number of businesses plan to adopt our platform for better cyber and data protection,” said CEO Jay Chaudhry in the investor briefing.</p>
<p>Moneyreview.gr with information from CNBC</p>
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<div class=Source: www.kathimerini.com.cy

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