Category: Blog
Cloud Computing Seen as Tech Haven Amid Pandemic Uncertainty
The coronavirus pandemic has pressured nearly every corner of the global economy, but analysts continue to see sunny days ahead for cloud computing and the ecosystem that surrounds the technology.
The sub-sector is seen as a rare bright spot in the current environment, particularly as the outbreak pushes more people to work remotely, contributing to a long-term trend of rising demand. The boost is expected to be broad based, helping software companies, communication firms, and chipmakers that focus on data-center products, which are processors used in cloud computing.
The lasting impact of Covid-19 could actually be a net positive,” wrote Richard Baldry, an analyst at Roth Capital Partners. Cloud-based communication companies “should see increased customer activity, at least once operational bandwidth returns to a somewhat more normal level for prospects.” He listed Five9, Medallia, eGain and LivePerson as names that could see stronger demand and which were trading at valuations he views as attractive.
So far this year, the Global X Cloud Computing ETF — an exchange-traded fund that tracks an index of companies involved in the space — is down 6.4%. A different ETF, the First Trust Cloud Computing ETF, is down 9.2%. Both have outperformed the S&P 500’s drop of more than 15% over the same period.
According to Wedbush, the pandemic has thrown “sales cycles, procurement/IT departments, and budgets into a tornado-like state of chaos,” resulting in unprecedented risks to IT spending. Even in this environment, analyst Daniel Ives wrote, “cloud remains a theme”; he expects $1 trillion to be spent on cloud computing over the coming decade.
Ives named Microsoft as “the Rock of Gibraltar cloud stock to own,” but said the trend would also support the cloud-computing businesses of both Amazon and Alphabet.
Earlier this week, Bank of America referred to cloud-focused chipmakers as a “shining house in [a] tough neighborhood,” referring to the headwinds facing other areas of the industry. Analyst Vivek Arya expects cloud capex to rise 13% in 2020. While this is down from a prior view of 16% growth — the lower estimate reflects “the most current Covid-19 headwinds” — it represents a “robust acceleration” from 2019, when capex grew just 3.5%.
The firm listed Broadcom, Nvidia, Advanced Micro Devices, Marvell Technology and Intel among the chipmakers most exposed to this trend. Nvidia has been one of the rare semiconductor gainers this year, and analysts have pointed to its data-center business as a tailwind.
Credits: Bloomberg
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What Will Be The Future Success Of Fashion Retail In The Digital Age
According to a recent survey by the Nielson market-market research group, the average American spends nearly four hours a day on computers- including mobile devices. Moreover, nearly 25 percent of that time will have been spent on social media. The tremendous influx of retail technology has changed the perception of how consumers purchase during this transitional time. At present, fashion and jewelry, brands are exploring ways to work with technological devices—primarily mobile. Even when they are in silent mode, they tempt us with the promise of limitless information. Moreover, and more importantly, most of us feel naked without the phone nearby.
At present, many fashion luxury analysts see the rise in online consumerism and the resurgence of modified shopping habits. But don’t expect established retailers to redesign their profitable products or their old way of doing things. Many of the fashion retailers do not have the expertise, funding or insight to make substantial change. They can, however, evolve. Since the advent of the internet, mankind has adapted to changes — many times reluctantly. In some cases, a bias against technology can create a recipe for failure.
It’s surely no coincidence that luxury fashion brands such as Louis Vuitton and Chanel have been announcing drastic corporate changes. Many established fashion retailers focused largely on and were convinced that various technological advances were out to get them. As anyone who’s spent time in the luxury industry knows, there’s plenty of opportunity in technology. The technical work of combining data with inspired marketing should not be underestimated in today’s fashion market. There is a complex task to create and drive a new consumer conversation in the twenty-first century.
Credits: Forbes
