True Value

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Microsoft Chairman and CEO, Satya Nadella. Photo by Ethan Miller/Getty Images.
True Value

Why Microsoft Shouldn’t Be the Top Choice for AI-Focused Investors

By Anita Ramaswamy · Jul 3, 2024 6:00am PDT · 6 comments
Microsoft is second only to Nvidia in the eyes of investors looking to benefit from the generative artificial intelligence boom. But its deluxe valuation suggests the market is underestimating the challenges it could face in its AI expansion, including possible profit margin declines or losing market share in enterprise software. Those looking... Microsoft is second only to Nvidia in the eyes of investors looking to benefit from the...
The San Francisco Databricks office. Photo by Smith Collection/Gado/Getty Images.
True Value

Databricks Has an Edge on Snowflake—but It May Not Be as Big as Investors Think

By Anita Ramaswamy · Jun 21, 2024 6:00am PDT · 4 comments
It may not be on the scale of Apple’s rivalry with Google, but the battle between Databricks and Snowflake is one of the most intense in Silicon Valley. Both firms help companies store and manage massive amounts of data—a service that should become more valuable with the rise of generative AI models. Their duel has become so intense... It may not be on the scale of Apple’s rivalry with Google, but the battle between...
GitLab co-founders Sid Sijbrandij (left) and Dmitriy Zaporozhets at the company's IPO in 2021. Photo via Nasdaq
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GitLab, DocuSign: Two Software Companies That May Not Stay Public for Long

By Anita Ramaswamy · Jun 12, 2024 6:00am PDT
Tech companies may soon be on a shopping spree, as the world adjusts to high interest rates and companies start looking for ways to juice growth. And for investors inclined to make a bet on potential targets, they need not go much further than two enterprise tech firms: GitLab and DocuSign. That’s our conclusion from wading through... Tech companies may soon be on a shopping spree, as the world adjusts to high interest rates and...
Why AWS’ Fat Margins Are Here to Stay
By Anita Ramaswamy · Jun 5, 2024 7:28am PDT · 3 comments
True Value

Why AWS’ Fat Margins Are Here to Stay

By Anita Ramaswamy · Jun 5, 2024 7:28am PDT · 3 comments
If you’re an investor who’s turned negative on Amazon Web Services because of its much-reported growth slowdown of 2023, you might want to look again. While the pioneer of cloud computing is no longer posting red-hot topline expansion numbers, growth picked up meaningfully in the first quarter. Meanwhile, its profit margins are... If you’re an investor who’s turned negative on Amazon Web Services because of its...
Salesforce CEO Marc Benioff. Photo by Bloomberg via Getty Images.
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Why the Enterprise Software Stock Sell-Off Is Overdone

By Anita Ramaswamy · May 31, 2024 6:00am PDT · 9 comments
You’d almost think the long-anticipated AI reckoning for enterprise software has finally come, judging from how some stocks have fallen in recent days. Shares of Salesforce, Workday and UiPath, among others, have dropped by more than 20% since those companies warned customers were wary about committing to long-term software deals. While... You’d almost think the long-anticipated AI reckoning for enterprise software has finally...
Tempus AI founder Eric Lefkofsky. Photo by Bloomberg via Getty Images.
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Tempus AI Shows IPOs Are Finally Getting Weird Again

By Cory Weinberg · May 24, 2024 6:00am PDT
The handful of tech companies that have taken the leap into the public markets over the past nine months have been sure to show investors heavy profits (Instacart and Arm), fast growth (Rubrik, Ibotta and Klaviyo) or a clear story about how they’re benefitting from artificial intelligence (Astera Labs and Reddit). Tempus AI, a healthcare... The handful of tech companies that have taken the leap into the public markets over the past nine...
Jensen Huang, left, and Colette Kress. Photos by Getty; X/J.P. Morgan.
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Ten Gifts Nvidia Gave Its Investors

By Amir Efrati and Anita Ramaswamy · May 23, 2024 9:21am PDT · 1 comment
How good was Nvidia's quarterly earnings call? Let us count the ways. Everyone is buzzing about Nvidia’s revenue nearly quadrupling to $26 billion in the quarter ended in April, mostly from the sale of artificial intelligence server chips. But Nvidia immediately shared three other pieces of good news: a strong sales forecast, a 10-to-1... How good was Nvidia's quarterly earnings call? Let us count the ways. Everyone is buzzing...
HubSpot's Cambridge, Mass. headquarters. Photo via AP.
Why HubSpot Needs Google
By Anita Ramaswamy · May 21, 2024 8:00am PDT · 3 comments
HubSpot's Cambridge, Mass. headquarters. Photo via AP.
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Why HubSpot Needs Google

By Anita Ramaswamy · May 21, 2024 8:00am PDT · 3 comments
HubSpot investors better hope that Google actually buys it. The marketing software company’s growth is slowing as the small businesses it caters to try to cut down their bills, and it faces mounting competition from flashy AI tools that could chip away at its business. As Google reportedly discusses an acquisition of HubSpot, which sells... HubSpot investors better hope that Google actually buys it. The marketing software...
Pinterest CEO Bill Ready. Photo by Bloomberg via Getty Images.
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Why Investors Are Starting to Take Pinterest Seriously

By Anita Ramaswamy · May 8, 2024 12:40pm PDT · 2 comments
If you’re looking for the social media stock that could, just maybe, break the logjam of the digital ad market—where Meta Platforms and Google take the lion’s share of spending, leaving the rest to everyone else—you might want to check out Pinterest. Yes, we’re talking about the company many investors likely left... If you’re looking for the social media stock that could, just maybe, break the logjam of...
Chart by Mike Sullivan.
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How Will AI Investment Affect Big Tech Profits? It May Be Hard to Find Out

By Anita Ramaswamy · May 2, 2024 7:32am PDT
The four big tech firms that reported earnings results in the past 10 days—Microsoft, Alphabet, Meta Platforms and Amazon—posted substantially richer operating profit margins than they have in several years. Investors shouldn’t get used to it. That boost to profits, a result of layoffs and other cost-cutting measures last year,... The four big tech firms that reported earnings results in the past 10 days—Microsoft,...
Chart by Mike Sullivan
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Meta’s Big Rally Spotlights Investors’ Questions About AI Returns

By Aaron Holmes · Feb 2, 2024 9:59am PST · 2 comments
Shares of Meta Platforms stock soared 20% on Friday as investors applauded the company’s fourth-quarter results, which showed a strong ad recovery from its 2022 slump. But the enthusiasm of some investors was tempered by uncertainty about the returns Meta can get from the billions it is pouring into new generative artificial intelligence... Shares of Meta Platforms stock soared 20% on Friday as investors applauded the company’s...
Selena Gomez, Steve Martin and Martin Short in a scene from "Only Murders in the Building." Photo by Craig Blankenhorn/Hulu
Why Disney’s Hulu Buyout Will Cost At Least $5 Billion More
By Sahil Patel and Martin Peers · Dec 4, 2023 7:00am PST
Selena Gomez, Steve Martin and Martin Short in a scene from "Only Murders in the Building." Photo by Craig Blankenhorn/Hulu
True Value

Why Disney’s Hulu Buyout Will Cost At Least $5 Billion More

By Sahil Patel and Martin Peers · Dec 4, 2023 7:00am PST
How much should Walt Disney Co. pay to buy Comcast’s 33% stake in Hulu, the video-streaming service best known for “Only Murders in the Building” and “The Bear”? It’s shaping up to be the most contentious entertainment industry deal of 2024. And guess what: Disney is likely to be on the hook for billions more,... How much should Walt Disney Co. pay to buy Comcast’s 33% stake in Hulu, the video-streaming...
Photo by Bloomberg.
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Why Stripe Is Cheaper Than Adyen

By Cory Weinberg · Feb 27, 2023 6:00am PST · 8 comments
Stripe has been blessed with a few big advantages over its Netherlands-based digital payments rival, Adyen. Stripe serves smaller businesses, allowing it to take a bigger cut of each sale. The vast majority of its customers are in the U.S., a more lucrative market than that of the European-centric Adyen. The result has been faster growth for... Stripe has been blessed with a few big advantages over its Netherlands-based digital payments...
A scene from the 2017 day when Okta went public. Photo by AP.
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Three Cybersecurity Stocks That Look Cheap

By Akash Pasricha and Martin Peers · Feb 21, 2023 7:02am PST · 1 comment
You can tell a company’s stock price has fallen too far when its shareholders resist private equity buyout offers on the grounds that valuations are too depressed for selling. That’s what has happened lately in enterprise software, and it’s a sign that there are bargains to be had for savvy investors. Two examples:... You can tell a company’s stock price has fallen too far when its shareholders resist...
Bill Ready, CEO of Pinterest. Photo by Bloomberg
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Pinterest Stock Prospects Hinge on ex-Googler’s Shopping Plans

By Mahira Dayal · Dec 16, 2022 6:00am PST
What a difference a year makes. At the start of 2022, Pinterest was on the outs with investors. Plagued by reports that executives were fleeing, along with falling user numbers, its stock was trading at a deep discount to that of Snap, a similar-size social media app that for the past few years had shown faster revenue growth. Today, the tables... What a difference a year makes. At the start of 2022, Pinterest was on the outs with investors....
Chart by Shane Burke
How Money-Losing Tech Firms Redefine Profits
By Cory Weinberg · Oct 31, 2022 6:00am PDT · 12 comments
Chart by Shane Burke
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How Money-Losing Tech Firms Redefine Profits

By Cory Weinberg · Oct 31, 2022 6:00am PDT · 12 comments
Last month, Rent the Runway CEO Jennifer Hyman announced that the e-commerce company, used by tens of thousands of fashion aficionados on a budget, had turned a tiny profit during the second quarter after several years of losses—at least, that is, by the firm’s favorite metric of profitability. But that definition of profitability... Last month, Rent the Runway CEO Jennifer Hyman announced that the e-commerce company, used by...
Chart by Shane Burke
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Why E-Commerce Disruptors Are Trading Like Brick-and-Mortar Dinosaurs

By Akash Pasricha and Martin Peers · Oct 17, 2022 6:00am PDT
E-commerce is on sale. Online commerce companies including ThredUp, Rent the Runway, Stitch Fix and Farfetch have seen their valuations tumble, putting them in the same ballpark as aging brick-and-mortar giants like Macy’s and Nordstrom. Already South Korea’s internet search giant, Naver, has taken advantage of the collapse to snap... E-commerce is on sale. Online commerce companies including ThredUp, Rent the Runway, Stitch Fix...
Art by Mike Sullivan
True Value

The Haziness in Microsoft’s Cloud Numbers

By Martin Peers · Sep 20, 2022 12:16pm PDT · 2 comments
Here’s a quick question for enterprise software acolytes out there: which tech giant is bigger in cloud, Microsoft or Amazon? It depends. Microsoft says total revenue for “Microsoft Cloud” was $91 billion in the year to June, which is significantly more than AWS’ $72 billion for the same 12-month period. But the... Here’s a quick question for enterprise software acolytes out there: which tech giant is...
True Value

Why ‘Battered’ SaaS Valuations Look Out of Touch With Reality

By Akash Pasricha · Aug 15, 2022 1:29pm PDT · 3 comments
Valuations for publicly traded enterprise software companies such as Salesforce and Workday have plunged from pandemic-era peaks, thanks to rising interest rates and worries that customers will cut software budgets during an economic slowdown. But there are signs the sell-off has gone too far. For the first time since at least 2019, the... Valuations for publicly traded enterprise software companies such as Salesforce and Workday have...
Netflix co-CEO Reed Hastings. Photo by Bloomberg.
Netflix Could Boost U.S. Revenue 21% With Advertising Push
By Jessica Toonkel · May 23, 2022 6:00am PDT · 2 comments
Netflix co-CEO Reed Hastings. Photo by Bloomberg.
True Value

Netflix Could Boost U.S. Revenue 21% With Advertising Push

By Jessica Toonkel · May 23, 2022 6:00am PDT · 2 comments
Netflix has spent its entire existence setting the trend for others in video streaming to follow. But as it prepares to launch an ad-supported tier, Netflix executives are pondering a different question: Which rival service should it follow as a model? At one extreme is Disney-controlled Hulu, which runs more ads than most services and therefore... Netflix has spent its entire existence setting the trend for others in video streaming to follow....