00:00Dan Ives of Wedbush maintaining his $3.25 price target on Salesforce and raising his year-end forecast for Snowflake
00:06to $2.80,
00:07writing, there is growing speculation that enterprise software budgets have started to shift towards AI initiatives,
00:13cannibalizing software spend, but these results represent an important gut punch to the AI ghost trade.
00:18Dan joins us now for more. Dan, good morning, good to see you.
00:20Great to be here.
00:21What is separating the winners and the losers right now in this space?
00:24Look, I think, I mean, at least they're a great job of talking about it comes down to monetization of
00:29AI.
00:30Now, look, it started off Palantir, then you saw Datadog.
00:35Snowflake, I view, is really a seminal quarter for the software.
00:38Just describe what they do and why they're in the sweet spot right now.
00:40So if you think about the data layer, what this is really showing is LLMs, the models are ultimately getting
00:45deployed,
00:46you know, the data warehousing, the middle layer.
00:49As companies go down the use case path, you need a Snowflake.
00:55So the point is, is that you're trying to now find companies in the second, third, fourth derivative who are
01:01actually going to benefit.
01:02You have chip players over here.
01:04You have the hyperscalers over here.
01:06In the middle is a Palantir, is a Snowflake, is a MongoDB.
01:10And I think what this shows, I call it the AI ghost trade, you can't just paint every company with
01:16the same brush saying that Anthropoc is going to destruct software.
01:19Snowflake's basically saying, you know, this is a Jalen Brunson-like quarter.
01:23Just to sort of frame this in a more comprehensive way, when you take a look at Salesforce versus Snowflake,
01:29how do you identify a moat that is enough for a software company to be sustainable in an AI era?
01:34Yeah, and bending off of back against the wall, right?
01:37And you're talking about 150,000 customers.
01:39Now you have to show, Asian forest crew is what I view as a pretty big step in the right
01:44direction.
01:45But we're still talking 3%, 4% of revenue.
01:47It's not significantly moving the needle.
01:49Now you guys show over the next two, three, four quarters that they're able to monetize 15%, 20% of
01:57the customer base.
01:58And that is right now, I wouldn't call it a race against time,
02:01but that's why there's so much pressure on Salesforce, pressure on Oracle, pressure on Adobe.
02:07Look what happened to Intuit.
02:08And I think that's why it's investors, winner's bracket, loser's bracket.
02:13CrowdStrike, Palo Alto, winner's bracket on CyberScore.
02:16Zscaler, obviously got put in the loser's bracket.
Comments