The technology sector is in the spotlight as leading AI company Nvidia (NVDA) is scheduled to report earnings on Wednesday. With AI hopes growing across the tech sector, investors want to know when the company will start seeing returns on its investments.
Rishi Jaluri, Managing Director of Software Equity Research at RBC Capital Markets, appears on Catalysts to discuss his outlook for the tech sector and his hopes for AI.
Jarria believes the short-term returns on AI investments are “very hard” to gauge, but he argues that overinvestment is better for these companies than underinvestment, noting that “this is truly a generational technology shift,” and stresses that investors must be patient.
Despite the general caution, Jallia names just one company he sees reaping big rewards from generative AI over the next 12 months: Microsoft (MSFT). He outlines three key elements that Microsoft needs to realize growth in AI. First, the company needs to show investors the acceleration of AI in its Azure business — what AI can look like without capacity constraints. Second, other software companies need to develop AI modules, because Microsoft will benefit from the growth of this ecosystem. Finally, Jallia stresses the importance of “actual use and adoption of AI in Microsoft's portfolio outside of the Azure line.”
To learn more about expert insights and the latest market trends, click here to watch this full episode of Catalysts.
This post was written by Angel Smith
