‘This is going to be a trend we see across the tech space, with management teams being conservative given the uncertain environment,’ analyst says
Microsoft Corp’s lackluster quarterly outlook points to more gloom ahead for the tech sector, analysts said, after the tech bellwether warned its customers were cautious about spending in a turbulent economy., the second most valuable U.S. company, sounded a cautious note in its quarterly earnings report as a steep fall in client spending has sparked a series of high-profile layoffs in the tech industry.
“Microsoft is the biggest bellwether for enterprise and cloud spending in the world. Nadella’s comments about slowdown in the cloud is not surprising... It confirms a darker macro is in the horizon,” said Dan Ives, analyst at Wedbush. Nadella, however, said Microsoft would focus on AI technology, calling it the next major wave of computing.
Analysts said the sharp slowdown in Microsoft’s revenue growth was a “warning sign” for the tech sector, with more weakness at its PC division than the cloud business.
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