This week is a hotly anticipated earnings week for tech giants like Amazon (AMZN) and Microsoft (MSFT). Investors are watching to see how AI investments will impact companies' bottom lines. Daniel Flax, Senior Research Analyst at Neuberger Berman, joins Market Domination to share his thoughts on what's to come.
Flax believes that future tech company revenues will be focused on “building out cloud infrastructure” and AI. With Amazon and Microsoft's revenues approaching, he notes that “we see a lot of growth in Azure and Amazon Web Services.” He points out that the tech giants' cloud businesses generate significant revenues, and argues that “the need for this investment is the right strategy,” but acknowledges that generating revenues from AI in particular will take time.
“I think there's a need for investment and capital expenditures, and I expect to see incremental revenue from these new areas over the next 12 to 24 months, but the bottom line is these are very healthy businesses for these companies,” Flax told Yahoo Finance.
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