Wednesday, February 1, 2023
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Await it – The Reformed Dealer

I had a little bit of a flashback final evening to the 12 months 2000, sitting in my workplace after hours watching JDS Uniphase collapse on the heels of its convention name after reporting “higher than anticipated” earnings for the quarter. All through 2000, techs and telecoms had been nonetheless making a ton of revenue, but it surely was changing into obvious that they had been nonetheless coasting on the spend from 1999. And that the surroundings was altering. So you’ll see a breathless 4pm “print” with a greater than anticipated EPS and income quantity, however then administration would get on the convention name and inform you that the outlook was deteriorating.

Firm after firm did the identical factor. Top quality or low high quality agency, it didn’t matter. Everybody was affected, from the blue chips like Cisco to the trashbags like Nortel. It didn’t matter. And so the mantra turned “Ignore the numbers, await the decision.”

That is precisely what final evening felt like, with the primary of the mega cap tech giants reporting. Microsoft’s earnings had been nice. Their outlook confirms the necessity for his or her having let go of 10,000 workers in latest days. The surroundings is altering. Throughout the pandemic they pulled ahead three years value of demand into one. Enterprise tech spend exploded. Client tech demand exploded. The tempo was by no means going to be sustainable. Now we pay for that pull-forward. The inventory worth has already paid for it, however not essentially in full.

This earnings season, firms in know-how and different development areas of the financial system are all going to be singing an identical tune. Issues are good proper now however the future is rising extra unsure by the day. My greatest guess is that cautious tones on convention calls would be the norm, not the exception. Should you had been the CEO or CFO of a Fortune 500 firm, why wouldn’t you undertaking warning proper now? What could be the benefit of telegraphing the rest headed into an apparent slowing of demand for just about all the things?

Michael and I talked about Microsoft’s report and the present state of issues final evening throughout the stay premiere of What Are Your Ideas, which has been watched by over 20,000 viewers up to now. Should you missed it, test it out under:



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