Tech companies' latest
earnings reports come at a key point in the economic rebound. Technology helped
much of the workforce survive the pandemic, and early in the Covid
crisis, Microsoft CEO Satya Nadella forecast
technology's vital role. Here's what he said on Microsoft's earnings call
back in May 2020:
As Covid-19
impacts every aspect of our work and life, we have seen two years' worth
of digital transformation in two months. From remote teamwork and
learning to sales and customer service to critical cloud infrastructure and
security, we are working alongside customers every day to help them stay open
for business in a world of remote everything.
There is both
immediate surge demand and systemic structural changes across all of our
solution areas that will define the way we live and work going forward.
Tonight, a little more than
a year later, a Wall Street analyst asked Nadella to reflect on
those comments: Did Covid pull forward demand or "is there a lot more
to come?"
That has become the critical
question for most tech companies as investors turn to more reopening-focused
stocks.
Nadella, for his part, isn't
predicting a sudden end to tech's dominance. Here's his response on
Microsoft's earnings call tonight:
5% of the world GDP is tech
spend, it's projected to double. I think that doubling will happen in a more
accelerated pace. ... What's going to happen is every business, whether you're
a retailer or a manufacturer, in the service sector, public sector or private
sector, digital adoption is the way you're going to be both resilient as well
as transform the core business processes.
Nadella has proven to be one of the country's best CEOs. If he's right about the pace of transformation, tech stocks could still be very attractive.
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